When the chairman of the Federal Reserve announced a goal of "zero inflation," which of the following economic policies was most likely being changed?
A. Supply-side policy.
B. Monetary policy.
C. Fiscal policy.
D. Congressional policy.
Answer: B
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One reason why firms replace markets for some activities is that firms
A) reduce the number of transactions required. B) enable individuals to avoid a large portion of their taxes. C) reduce the rate at which the product is wasted. D) do not require team production.
Suppose, in the United States, each farmer is given a federal agricultural subsidy worth $30,000 . What will be the effect of such subsidy?
a. It discourages domestic agricultural production. b. It allows U.S. farmers to sell their products for lower prices in foreign markets. c. It gives foreign producers an unfair cost advantage. d. It increases the amount of agricultural imports into the United States. e. It reduces the prices of the primary products in the U.S. market.
The exchange rate effects of fiscal policy are:
A. ambiguous because the price and income effects goes against the interest rate effect. B. clear because the price and interest rate effects dominate the income effect. C. clear because the price and income effects dominate the interest rate effect. D. ambiguous because the price and interest rate effects goes against the income effect.
Most economists agree that while there are a seemingly endless number of ways to promote economic development:
A. there is no need to measure effectiveness. B. there is no way to determine which ways are the best. C. there are few ways to measure their effectiveness. D. there are just as many ways to measure effectiveness.