According to the rational expectations school, expansionary fiscal policy is harmful to the economy, but expansionary monetary policy can be effective when the Fed tries specific targeting
Indicate whether the statement is true or false
F
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When the central bank sells $1,000,000 worth of government bonds to the public, the money supply:
A. increases by $1,000,000. B. decreases by $1,000,000. C. decreases by more than $1,000,000. D. decreases by less than $1,000,000.
Brazil has a relatively low income per capita because it has relatively few natural resources
a. True b. False Indicate whether the statement is true or false
The major objective of the Federal Reserve System is to: a. make substantial profits for its member banks
b. help in generating stabilization policies for the economy. c. distribute paper money and coins to banks and retail stores. d. prevent closure (failure) of individual member banks.
Which of the following is a partially valid economic argument for restricting free trade?
a. Restrictions on foreign trade will increase employment and permanently reduce unemployment.
b. Removal of restrictions that have existed for years will initially cause inflation.
c. Infant industries need permanent protection to develop and gain productive efficiency.
d. A nation needs to protect industries that are vital to national defense in case of future international conflict.