During the financial crisis of 2008, Fed policy
a. caused the monetary base to shrink significantly.
b. approximately doubled the M1 money supply.
c. approximately doubled the monetary base.
d. maintained the monetary base at a constant level.
C
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With respect to Figure 7-2, an increase in government spending
a. shifts the IS curve to the left by G(? b/1 ? b). b. shifts the IS curve to the right by G(1 ? b/1 ? b). c. shifts the IS curve to the right by G(1/1 ? b). d. does not shift the IS curve.
Which of the following provides the foundation of the case for free trade?
a. The law of diminishing marginal utility b. The anti-dumping argument c. The industrial diversity argument d. The theory of comparative advantage
Which of the following mechanisms helps output to return to potential after a supply shock?
a. A change in the nominal wage b. Changes in business decision making strategies c. Changes in the capital stock d. The rigidity of the price level e. Changes in inventories
Changes in real GDP are best used to measure
A. Population growth. B. Price level changes. C. Inflation. D. Business cycles.