An economic policy has a decent chance of working as intended, if ________
A) the policy causes no change in expectations
B) if mistaken expectations are not very costly
C) the rationale behind the policy is well-understood by the public
D) expectations are formed in the same way by both the public and the policymakers
D
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The economy’s self-correcting mechanism tends to push the unemployment rate back to a specific rate of unemployment. How?
What will be an ideal response?
High profits in some risky industries attract additional entrepreneurs to those industries.
Answer the following statement true (T) or false (F)
During the Civil War, the government faced two classic problems: How to acquire the financial resources it needed to carry on the affairs of government and, at the same time, stabilize the monetary system. It solved this dual problem by creating
a. Continental currency which soon rapidly depreciated b. the Second Bank of the United States c. a national banking system by enacting the National Bank Act d. the Exchequer of the Currency department to abolish the national currency e. speculative land notes that could easily be converted to gold
Figure 36-7
?
In Figure 36-7, there are three aggregate expenditure functions (C + I + G + X? IM) for an open economy. Which of the following would cause a movement from A to B?
A. An increase in interest rates B. An appreciation of the dollar C. A depreciation of the dollar D. An increase in the U.S. price level