When policy makers are constantly shifting back and forth between expansionary and restrictive monetary policy, this is most likely to
What will be an ideal response?
promote instability because the time lags of monetary policy are long and unpredictable.
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Why don't the winners from free trade win the political argument?
What will be an ideal response?
If policy makers do nothing in response to an inflationary gap, what will happen?
a. a rapid movement toward lower unemployment and higher inflation b. a rapid movement toward lower unemployment and lower inflation c. a slow movement toward higher unemployment and higher inflation d. a slow movement toward lower unemployment and lower inflation
Because pollution taxes raise the costs of production for firms, firms:
A. will lower prices to consumers. B. must receive a higher price at every level of output. C. will increase the quantity produced at every price. D. will quit producing goods that generate pollution.
Phases and turning points of the business cycle are expansion, peak, recession and trough
Indicate whether the statement is true or false