Suppose the economy is operating below its full employment level. The Fed
A) can move the economy toward the full employment level by expanding the money supply to increase aggregate supply.
B) can move the economy toward the full employment level by expanding the money supply to increase aggregate demand through both its direct and its indirect effects.
C) can move the economy toward the full employment level by expanding the money supply to increase aggregate demand and to hold prices constant.
D) is powerless to affect either aggregate demand or aggregate supply. Fiscal policy is needed.
B
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The market clearing price refers to the:
A. price where quantity demanded and quantity supplied are the same. B. equilibrium price that quantity supplied is the highest possible. C. maximum price where all suppliers are willing to sell all their production. D. minimum price at which items could be sold.
Suppose an economist develops a theory that higher food prices arise from higher gas prices. According to the scientific method, which of the following is the economist's next step?
a. Collect and analyze data. b. Go to a laboratory and generate data to test the theory. c. Publish the theory without testing it. d. Consult with other economists to see they agree with the theory.
An appreciation of the U.S. dollar relative to the Japanese yen causes
A) a lower dollar-price of Japanese goods which induces the U.S. to increase their purchasing of Japanese goods. B) the quantity demanded of U.S. dollars to increase because the Japanese want to buy more U.S. goods. C) the Japanese to buy more U.S. goods, causing the dollars to appreciate further. D) the U.S. to buy less Japanese goods, causing the U.S. to depreciate.
Use the above table and assume a fixed cost of $200. At an output of 2, ATC is
A. $150.
B. $200.
C. $250.
D. $300.