Suppose the economy is on the classical range of the aggregate supply curve and has a problem with inflation. According to Keynesian theory, which of the following is an appropriate discretionary fiscal policy to use in this situation?
a. A reduction in the money supply.
b. Less government regulation.
c. Increase federal spending.
d. Higher taxes.
d
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The economic point of view assumes central bankers, bureaucrats, elected politicians, and tax collectors
A) are immoral. B) act selfishly. C) respond to incentives. D) act in the national interest.
If the penalty on sellers of an illegal good is less than the penalty on buyers of an illegal good, then supply of the good will ________ by ________ demand and the price of the good will ________
A) increase; more than; increase B) decrease; more than; decrease C) decrease; less than; decrease D) decrease; the same amount as; remain the same
Warren always carries a one hundred dollar bill in case of emergencies. This is an example of the
A) precautionary demand for money. B) asset demand for money. C) transactions demand for money. D) wealth demand for money.
If the banking system has demand deposits of $100,000, total reserves equal to $15,000, and a required reserve ratio of 10 percent, the banking system can increase the volume of loans by a maximum of
A. $50,000. B. $5,000. C. $85,000. D. $100,000.