To what extent should monetary policy be used to fine-tune the economy?
As a fine-tuning strategy, it is unlikely to be effective; there are too many other variables in the marketplace, and our predictive models are not that accurate for forecasting the future of the economy.
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Transactions costs are the
A) costs of using the Coase theorem. B) opportunity costs of conducting a transaction. C) external marginal costs of the externality. D) reason why taxes cannot affect the inefficiency resulting from an external cost. E) external costs when a firm pollutes.
Which of the following is included in the narrow definition of the money supply?
a. Cash in bank vaults b. Savings deposits c. Money market mutual fund accounts d. Negotiable certificates of deposit e. Checkable deposits
Average real wages have not risen significantly since approximately 1973.
Answer the following statement true (T) or false (F)
If the government's budget is balanced at the start of a recession, and the government is attempting to stabilize the economy through fiscal policy
A. a budget surplus would be expected. B. a budget deficit would be expected. C. government spending, taxes, and transfer payments must all be reduced in a fashion that preserves a balanced budget. D. it should increase government spending, lower taxes, and increase transfer payments in a manner that preserves a balanced budget. E. government spending, taxes, and transfer payments must remain unchanged.