The case for a "hands off" economic policy is based on the widely held belief that
A. Fiscal policy works but monetary policy does not.
B. Discretionary policy can improve the economy in theory but is often impractical in practice.
C. Monetary policy works but fiscal policy does not.
D. Economic theory is inadequate to formulate effective discretionary policy.
Answer: B
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Refer to the figure below.________ inflation will eventually move the economy pictured in the diagram from short-run equilibrium at point ________ to long-run equilibrium at point ________. 
A. Rising; A B. Falling; A; C C. Falling; B: C D. Rising; A; C
The Taylor rule is an example of
A) an instrument rule focused on the monetary base. B) an instrument rule focused on the federal funds rate. C) an instrument rule based on M1. D) a targeting rule focused on the monetary base. E) a targeting rule focused on the federal funds rate.
Which of the following causes average total cost to rise at high levels of output?
a. diminishing marginal product b. average fixed costs c. plant underutilization d. economies of scale
Health care costs have been rising due to
A) an aging population. B) new technologies. C) third-party financing. D) All of the above are correct.