If velocity is highly unstable, then targeting the money supply
a. will be effective in stabilizing the LM curve and interest rates.
b. has the same effects as targeting interest rates.
c. will be ineffective in stabilizing aggregate demand.
d. none of the above.
C
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The use of discretionary fiscal policy is hampered by i. difficulty of estimating the level of potential GDP. ii. lack of accuracy of economic forecasts. iii
the small impact tax cuts and increases in government expenditure have on aggregate demand. A) i only B) ii only C) iii only D) i and ii E) i, ii, and iii
How are the fundamental economic decisions determined in Cuba?
A) The United Nations decides because Cuba is a developing economy. B) These decisions are made by the country's elders who have had much experience in answering these questions. C) The government decides because Cuba is a centrally planned economy. D) Individuals, firms, and the government interact in a market to make these economic decisions.
The decline in the US manufacturing sector was the result of:
a. increasing productivity in the manufacturing sector. b. the increasing ability of consumers to purchase foreign manufactured goods more cheaply. c. faster growth of the service sector. d. All of the above are correct. e. Only b and c are correct.
When the government imposes safety regulations on a particular job or labor market, what is most likely to happen?
A. Utility will increase if workers are able to correctly evaluate working conditions. B. Wages will increase. C. Wages will fall but utility will increase if workers misperceive on-the-job risk. D. Firms that used to offer bad working conditions will be required to shut down. E. Employment will increase.