In executing countercyclical policy, the Fed
a. is more effective during recessions than during inflationary periods
b. is more effective during inflationary periods than during recessions
c. is typically ineffectual because it is difficult for the Fed to determine just where the economy is on the business cycle
d. relies on the government to execute complementary fiscal policy otherwise the Fed's monetary policy is weak and typically ineffective
e. relies more on moral suasion than on the three primary tools available to it
B
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Usury laws are designed to ensure that interest rates in the market do not exceed acceptable norms.
Answer the following statement true (T) or false (F)
If the government ran a major budget deficit, and there was no noticeable effect on the level of GDP, this could be taken as evidence of
a. Laffer curve effect. b. structural deficit. c. crowding-out. d. monetary policy ineffectiveness.
Thurman is a writer who works from his home. Thurman lives next door to Phil, the drummer for a local band. Phil needs a lot of practice to earn $250, which is his share of the band's profit. Thurman gets distracted by Phil's drumming but he needs to get his writing done to earn $500 for his current article. Which of the following is an efficient solution?
a. Phil offers Thurman $499 to allow Phil to continue drumming. Thurman accepts and both are better off. b. Phil offers Thurman $249 to allow Phil to continue drumming. Thurman accepts and both are better off. c. Thurman offers Phil $251 to stop practicing his drumming. Phil agrees and both are better off. d. Thurman offers Phil $501 to stop practicing his drumming. Phil agrees and both are better off.
If one person's use of a good diminishes another person's enjoyment of it, the good is
a. rival in consumption. b. excludable. c. normal. d. exhaustible.