Activists believe that
A) there is sufficient flexibility in wages and prices to allow the economy to equilibrate at full-employment Real GDP in a reasonable period of time.
B) discretionary fiscal policies do not work.
C) discretionary monetary policies do not work.
D) fine-tuning to smooth out the business cycle is feasible.
D
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A decrease in the supply of dollars on the foreign exchange market, all else equal, will result in:
A) appreciation of the U.S. dollar and depreciation of the foreign currency. B) appreciation of the U.S. dollar and appreciation of the foreign currency. C) depreciation of the U.S. dollar and depreciation of the foreign currency. D) depreciation of the U.S. dollar and appreciation of the foreign currency.
If the absolute price elasticity of demand of a good is 1.46, then the total revenues will increase if its market price
A) increases. B) decreases. C) stays the same. D) changes, but we can't tell without more information if the price increases or decreases.
Open market operations are the
A) buying and selling of Federal Reserve Notes in the open market. B) means by which the Fed supplies the economy with currency. C) means by which the Fed acts as the government's banker. D) buying and selling of government securities by the Fed. E) buying and selling of government securities by the Treasury.
Which of the following policies might create demand-pull inflation?
A. An increase in interest rates B. A decrease government spending C. A cut in taxes D. All of these policies could create demand-pull inflation