A factor increasing the popularity of monetarism in the late 1970s was the
A. ease with which the Fed controlled the money supply.
B. excellent performance of the economy in the 1970s.
C. fear of budget deficits and growing federal debt.
D. predictable behavior of velocity until about 1980.
Answer: D
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Gary usually does not donate for charity. However, he donated money for an environmental awareness campaign launched by his friend. This is an example of ________
A) rationalism B) pure altruism C) impure altruism D) liberalism
In the above figure, the economy is at point a on the initial supply of loanable funds curve SLF0. What happens if disposable income decreases?
A) Nothing; the economy would remain at point a. B) There would be a movement to a point such as b on supply of loanable funds curve SLF0. C) The supply of loanable funds curve would shift rightward to a curve such as SLF2. D) The supply of loanable funds curve would shift leftward to a curve such as SLF1.
In general, an externality is created when
A) people are affected (other than by price) by a transaction which they were not part of. B) firms produce a product of low quality and consumers don't like it. C) firms have to pay for pollution the environment. D) the government subsidizes education.
Using graphs, explain how indirect crowding out can occur when the government increases spending in an attempt to stimulate the economy
What will be an ideal response?