If the federal government tries to make fiscal policy sustainable by increasing seigniorage, the economy would experience ________ and will result in ________ potential GDP
A) a decrease in the growth rate of the money supply; lower
B) an increase in the growth rate of the money supply; higher
C) an increase in inflation; lower
D) a decrease in the real interest rate; higher
C
You might also like to view...
A monopolist can charge a high price if:
a. the quantity demanded of its product is positively related to price. b. the demand for its product is relatively price-elastic. c. the demand curve for its product is negatively sloped. d. the demand for its product is relatively price-inelastic. e. there exist a large number of substitutes for its product.
If education produces positive externalities and the government does not intervene in the market, we would expect
a. the market equilibrium price to be higher than the efficient equilibrium price b. the market equilibrium quantity to be lower than the efficient equilibrium output level. c. the market equilibrium quantity to be higher than the efficient equilibrium output level. d. none of the above
The Fed
A) can examine the books of a member bank without warning. B) can examine the books of a member bank after giving advance notice. C) can examine the books of a member bank with the bank's permission. D) is never allowed to see the books of a privately owned bank.
Supply-side economics
A. promotes reducing taxes to create incentives to increase productivity. B. promotes expansionary fiscal policy by simultaneously increasing taxes and government spending. C. is based on the Ricardian equivalence theorem. D. is based on the crowding-out effects.