In the Keynesian model, suppose the Fed sets a target for the money supply. If the IS curve shifts to the left, and the Fed wants to keep output unchanged, what should the Fed do?
A) Reduce taxes.
B) Reduce the money supply.
C) Increase taxes.
D) Increase the money supply.
D
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The amount of a tax paid by the buyers will be larger the
A) more elastic the demand and the more inelastic the supply. B) more inelastic the demand and the more elastic the supply. C) more inelastic are both the supply and demand. D) more elastic are both the supply and demand.
Which of the following would increase the unemployment rate?
A) an increase in unemployment insurance payments B) a law making it illegal to work more than 35 hours per week C) a cut in unemployment compensation D) a decrease in the minimum wage
Explain what causes the three types of unemployment. What advice for finding a job would be appropriate for someone in each type of unemployment?
What will be an ideal response?
The current role of the International Monetary Fund is one of
a. supervising a system of fixed exchange rates. b. providing assistance to countries with currency or debt problems. c. setting exchange rates based on a gold exchange standard. d. acting as a lender of last resort to central banks.