Use the following diagram to answer the next question.
In the diagram, solid arrows reflect real flows and broken arrows are monetary flows. Flow (2) might represent
A. the provision of national defense by government.
B. a government subsidy to farmers.
C. welfare payments to low-income families.
D. corporate income tax payments.
Answer: D
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Monetary policy has a ________ effect on aggregate demand in a(n) ________ economy, and fiscal policy has a ________ effect on aggregate demand in a(n) ________ economy
A) stronger; closed; weaker; open B) stronger; open; weaker; open C) weaker; open; weaker; open D) weaker; closed; weaker; closed
__________ is the science or practice of managing money or other assets
a. Actuarial management b. Budgeting c. Accounting d. Financial management
Whenever a regulatory system is set up, individuals or firms being regulated will figure out ways to get around these regulations. This is referred to as the law of:
A. demand. B. unintended consequences. C. diminishing returns. D. diminishing control.
During very bad recessions, if demand rises, aggregate supply will rise in the form of higher _____.
Fill in the blank(s) with the appropriate word(s).