According to economist Milton Friedman (1912-2006), the source of instability in the economy could be thought of as a:
A. baseball manager (the Fed) that removes his starting pitcher too soon and sees a five-run
lead evaporate in a single inning.
B. duck hunter (the Fed) who starts shooting at ducks well before they fly over.
C. a camp councilor (the Fed) who is wearing a baseball cap that has two bills and says, "I
am the leader; which way did they go?"
D. backseat car passenger (the Fed) who occasionally leans over the front seat and abruptly
D. backseat car passenger (the Fed) who occasionally leans over the front seat and abruptly
You might also like to view...
Gross Domestic Product is best described as the
a. measure of a nation's total economic welfare. b. national income, including nonmarket income. c. sum of money values of all final output produced in the domestic economy within the year. d. national output minus environmental damage.
During normal times, if the marginal propensity to consumer is 3/4, and the government borrows $10 billion in order to increase spending by that amount, real output will expand by
a. more than $40 billion, because both the additional borrowing and the additional spending will stimulate real output. b. $40 billion, because the net multiplier will be 4. c. less than $40 billion, because the additional borrowing will place upward pressure on real interest rates, weakening the impact of the multiplier. d. $10 billion, because during normal times, the government can borrow funds without any increase in interest rates.
Assume that running in a marathon increases a person's risk of dying from almost negligible to about 1 in 50,000. If people know this risk and still choose to run marathons, economists would most likely conclude that people:
A. are irrational. B. have self-control problems. C. place no value on their lives. D. place a finite value on their lives.
A person's real income will increase by 3% if her nominal income increases by
A. 5% while the price index falls by 2%. B. 5% while the price index rises by 2%. C. 2% while the price index falls by 5%. D. 2% while the price index rises by 5%.