"Discretionary fiscal policy is a fiscal action initiated by an act of the Federal Reserve, while automatic fiscal policy is a fiscal action induced by the state of the economy." Is the previous statement correct or incorrect? Explain your answe
What will be an ideal response?
The statement is incorrect. The statement is correct about automatic fiscal policy. But it is incorrect about discretionary fiscal policy because discretionary fiscal policy is not initiated by the Federal Reserve—it is initiated by an act of Congress.
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The following diagram shows the rate of inflation each year during a five year span. Use this diagram to answer the next question.
In which year did prices go down?
A. Year 1 B. Year 2 C. Year 3 D. Year 4
If the nominal interest rate increases without any change in the rate of inflation:
A) the ratio of real interest rate to nominal interest rate increases. B) the real interest rate increases. C) the real interest rate decreases. D) the real interest rate remains the same.
Kyle and Stan are playing Odds or Evens, where Kyle is designated as the "odd" player and Stan is designated as the "even" player. They decide to play the game 10 times. If Kyle adopts a pure strategy of "shoot 2," Stan shoul
A) also adopt a pure strategy of "shoot 2." B) adopt a pure strategy of "shoot 1." C) adopt a mixed strategy of "shoot 1" 50% of the time and "shoot 2" 50% of the time. D) adopt a mixed strategy of "shoot 1" more than 50% of the time and "shoot 2" less than 50% of the time.
Which cost curve is continually upward sloping?
a. the average total cost curve b. the total cost curve c. the marginal cost curve d. the average variable cost curve