?Classical theory advocates _____________ policy and Keynesian theory advocates ______________ policy.
A. ?nonintervention; intervention
B. ?active; nonstabilization
C. ?stabilization; fixed wage
D. ?fixed rule; passive
Answer: A
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Suppose the economy is initially experiencing a recessionary ga
A) a reduction in the size of the recessionary gap and increase in real GDP. B) an increase in the size of the recessionary gap and decrease in real GDP. C) an inflationary ga
The above figure shows the market for rice in Japan where price is expressed in dollars. S represents the domestic supply curve, and the horizontal line at P = $1 represents the world supply curve
If a $1 tariff is imposed on imported rice, the loss in social welfare is A) b + c + d + e. B) a. C) i. D) a + c + d + e.
Since World War II, the size of the U.S. national debt relative to income
a. increased continuously. b. decreased continuously. c. increased and then decreased. d. decreased and then increased.
With rational expectations, a policy that would decrease AD would certainly lead to: a. higher inflation and lower unemployment in the short run
b. lower inflation and higher unemployment in the short run. c. higher inflation and no change in unemployment in the short run, if people's expectations were correct. d. none of the above.