If monetary policymakers fear a recession resulting from increased pessimism on the part of business people, and they want to avoid the recession, they would:
A. likely lower their target rate for inflation.
B. shift the monetary policy reaction curve to the right.
C. shift the monetary policy reaction curve to the left.
D. encourage fiscal policymakers to act.
Answer: B
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Firm X owns both tea and coffee plantations. It sells directly to the public. If the firm wants to increase the sales for the coffee, assuming that tea and coffee are substitutes, which of these strategies can it employ?
a. Increase the price for the tea b. Offer free expedited shipping on the coffee c. Advertise the tea more heavily d. Both A&B
Suppose the velocity of money is 8, the amount of money in circulation is $200 billion, the index of prices is 150, and real GDP is $10 billion. According to the strict quantity theory of money, if the money supply doubled to $400 billion,
a. the velocity of money would fall to 4. b. the index of prices would increase to 300. c. real GDP would increase to $20 billion. d. the velocity of money would rise to 16.
Public provision of education might
A. cause property values to fall. B. crowd out private provision. C. decrease local taxes. D. none of these answer options are correct.
Which of the following factors would indicate a less elastic demand?
A. The good represents a large fraction of the budget. B. Demand is measured over a longer period of time. C. There are few substitutes. D. The price of the good is high.