"Economists have generally come to agree that monetary policy is better suited than fiscal policy for controlling GDP" because
A) money is neutral and therefore changes affect real income but not prices.
B) fiscal spending and tax changes affect the economy less than changes in the money supply.
C) the Fed can make decisions quickly, Congress and the President more slowly.
D) Congress can make decisions quickly, the Fed more slowly.
C
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If you want to deflate the current price of something to eliminate the effect of inflation,
a. divide the number by the price index. b. multiply the number by the price index. c. multiply the number by 2 and then divide by the price index. d. multiply the number by the price index and then divide by 2.
Which of the following reflects the concept of required reserves?
A. The money multiplier is greater than 1. B. Required reserves are equal to total reserves. C. Excess reserves are equal to 0. D. Banks can lend only their required reserves.
In the aggregate expenditures model, if aggregate expenditures (AE) equal $6 trillion and GDP equals $7 trillion, then:
A. inventory depletion equals ?$1 trillion. B. inventory accumulation equals $1 trillion. C. investment equals $1 trillion. D. investment equals ?$1 trillion.
For this question assume that technological progress does not occur. The rate of saving in Canada has generally been greater than the saving rate in the U.S. Given this information, we know that in the long run
A) Canada's growth rate will be greater than the U.S. growth rate. B) investment per worker in Canada will be no different than U.S. investment per worker. C) capital per worker in Canada will be no different than U.S. capital per worker. D) all of the above E) none of the above