If we are in a horizontal region of the money demand curve, expansionary monetary policy has __________ effect on output and expansionary fiscal policy has __________ effect on output
A) no; no
B) no; a strong
C) a strong; no
D) a strong; a strong
B
You might also like to view...
The interest parity condition requires that:
A) all countries have the same interest rate. B) there is a unique exchange rate for every output level. C) purchasing power parity hold. D) interest rates are fixed in the short run. E) the money supply is held constant.
The most common form of "forced savings" in the U.S. is:
A. Social Security. B. FICA. C. unemployment insurance. D. Medicare.
If the government removes a binding price ceiling from a market, then the price received by sellers will
a. decrease, and the quantity sold in the market will decrease. b. decrease, and the quantity sold in the market will increase. c. decrease, and the quantity sold in the market will increase. d. increase, and the quantity sold in the market will increase.
What would be the effect of a reduction in the corporate profits tax?
a. Investment would decrease, the production function would shift downward, productivity would decrease, and so would output. b. Investment would increase, the production function would shift upward, productivity would increase and output would decrease. c. Investment would increase, the production function would shift upward, and both productivity and output would increase. d. Investment would decrease, the production function would shift downward, and both productivity and output would increase. e. Investment would increase, the production function would shift upward, productivity would decrease and output would increase.