According to the classical school, the best countercyclical policy for the government to follow is to
a. increase the money supply until money demanded equals money supplied
b. cut taxes to stimulate production
c. do nothing
d. cut government spending to curb inflation
e. cut the money supply to curb inflation
C
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If real per capita Gross Domestic Product (GDP) grows at a constant annual rate of 4 percent and the annual population growth rate increases from 1 percent to 2 percent, the annual rate of growth of per capita real GDP will
A) increase. B) decrease. C) remain unchanged. D) increase or decrease depending.
If demand is price elastic, total revenue is
a. directly related to quantity demanded b. inversely related to quantity demanded c. directly related to price d. directly related to price and inversely related to quantity demanded e. not related to either price or to quantity demanded
The increase in welfare in both countries that results from specialization and trade is called:
A. surplus enhancement. B. exportation surplus. C. gains from trade. D. deadweight gain.
Based on the graph for saving incentives, a tax law change encouraging saving would shift the ______.
a. loanable funds supply curve to the left
b. loanable funds supply curve to the right
c. loanable funds demand curve to the left
d. loanable funds demand curve to the right