Some economists argue that
a. monetary policy should actively be used to stabilize the economy.
b. fiscal policy should actively be used to stabilize the economy.
c. fiscal policy can be used to shift the AD curve.
d. All of the above are correct.
d
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A competitive market maximizes social welfare because in a competitive market,
A) profits are zero. B) price equals marginal cost of the last unit produced. C) price equals average cost of the last unit produced. D) there is free entry and exit.
The personal income tax is based on the benefits-received principle of taxation
a. True b. False
Unemployment insurance payments act as automatic stabilizers by:
a. allowing for more consumer spending during prosperity. b. making the unemployment rate worse during a recession. c. allowing for more consumer spending during a recession. d. changing the Phillips curve to a Laffer curve.
If output increases, which of the following would occur?
a. Prices of non-labor inputs, input requirements per unit of output, and unit costs would all increase, and the economy would move downward along the aggregate supply curve. b. Prices of non-labor inputs, input requirements per unit of output, and unit costs would all decrease, and the economy would move downward along the aggregate supply curve. c. Prices of non-labor inputs, input requirements per unit of output, and unit costs would all decrease, and the economy would move upward along the aggregate supply curve. d. Prices of non-labor inputs, input requirements per unit of output, and unit costs would all increase, and the economy would move upward along the aggregate supply curve. e. Prices of non-labor inputs and input requirements per unit of output would increase, unit costs would decrease, and the economy would move downward along the aggregate supply curve.