When aggregate demand is high, risking higher inflation, those in favor of using monetary and fiscal policy to stabilize the economy might recommend
a. increasing government spending.
b. expanding the money supply.
c. lowering taxes.
d. the Fed sell government bonds.
d
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For the monopolistically competitive firm, the demand curve it faces will be flatter:
A. the more differentiated the good is. B. the less differentiated the good is. C. the more complementary the good is. D. the less complementary the good is.
Which of the following events triggered intense debate over the classical model of the economy?
a. The U.S. Civil War b. World War I c. the Baby Boom d. The Great Depression e. World War II
The price controls on consumer goods during World War II led to
A. permanent surpluses. B. stable long-term prices. C. a burst of inflation when they were ended. D. increased production of consumer goods to satisfy demand.
According to the Keynesian aggregate expenditures model, equilibrium and full employment:
A. always occur at the same income level of real GDP. B. may differ, but there is an automatic mechanism that directs the economy toward full-employment equilibrium. C. could never occur at the same level of real GDP. D. do not necessarily occur at the same level of real GDP.