The U.S. experience during the 1980s and 1990s illustrates that
a. fiscal policy is substantially more potent than monetary policy.
b. a balanced budget is essential for the achievement of price stability.
c. a monetary policy that keeps the inflation rate low and steady will help promote economic stability.
d. there is a trade-off between inflation and unemployment-the unemployment rate can be reduced if we are willing to tolerate higher rates of inflation.
C
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U.S. exports create a ________.
A. supply of foreign currencies and a demand for dollars in the foreign exchange markets B. supply of foreign currencies and a supply of dollars in the foreign exchange markets C. demand for foreign currencies and a demand for dollars in the foreign exchange markets D. demand for foreign currencies and a supply of dollars in the foreign exchange markets
An increase in the price level in the economy leads to
A) a leftward shift in the demand for money curve. B) a rightward shift in the demand for money curve. C) a leftward movement along the demand for money curve. D) a rightward movement along the demand for money curve.
There are two equilibria in each of the following two-player games except
A) a prisoner's dilemma game. B) a pure coordination game. C) an assurance game. D) a battle of the sexes game.
The cross elasticity between two goods, X and Y, is positive. From this, we can conclude that goods X and Y are:
A. substitute goods. B. complementary goods. C. unrelated goods. D. inferior goods.