Advocates of stabilization policy prefer quick medicine for economic ills. This leads some observers to favor fiscal policy while others endorse monetary policy. Describe the positions of each side in the debate and what seems to be the current consensus
Fiscal policy advocates argue that fiscal policy works more quickly on aggregate demand and that monetary policy only works indirectly through interest rates and investment spending. Monetary policy advocates emphasize the political nature of fiscal policy, which means that fiscal policy has very long lags between recommendation and action. In the current, rather confrontational and divided political atmosphere, most analysts agree that monetary policy may be the "only game in town."
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Which of the following terms refers to an unusually severe, prolonged recession, typically with an unemployment rate that exceeds 20%?
A) Depreciation B) Deflation C) Inflation D) Depression
Personal income equals personal disposable income plus
a. payroll taxes. c. transfer payments. d. dividend payments. d. personal saving. e. personal taxes.
When an American sells a factory in Chicago to a citizen of Brazil, the transaction is registered as a debit in the U.S. capital account.
Answer the following statement true (T) or false (F)
Supply-side economists contend that the system of taxation in the United States:
A. Creates incentives to save and invest B. Creates dis-incentives to work C. Generates maximum tax revenue D. Reduces the effects of cost-push inflation