According to the Keynesian view, the proper response to a severe recession would be
a. an increase in taxes in order to reduce the budget deficit.
b. an increase in government spending financed by borrowing.
c. a shift toward a restrictive monetary policy to reduce aggregate demand.
d. reliance on automatic stabilizers to direct the economy toward full employment.
B
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Jim has the following assets and liabilities:Credit Card balance$2,000Cash$500Government bonds$2,000Stocks$5,000Checking$750Car loan balance$5,000Car$15,000Which of the following actions would decrease Jim's money demand by $200?
A. Jim writes a $200 check for cash and holds the cash. B. Jim sells a $200 government bond and puts the proceeds in his checking account. C. Jim writes a check for $200 to pay down his credit card balance. D. Jim sells $200 worth of stocks and puts the proceeds in his checking account.
According to the figure shown, if Joe puts forth high effort, then Sarah should:
This figure shows the payoffs involved when Sarah and Joe work on a school project together for a single grade. They both will enjoy a higher grade when more effort is put into the project, but they also get pleasure from goofing off and not working on the project. The payoffs can be thought of as the utility each would get from the effort they individually put forth and the grade they jointly receive.
A. put forth high effort.
B. put forth low effort.
C. leave school.
D. give an ultimatum.
If one adopts a pure free market approach to depletable resources, then one can expect the price of resources to
a. rise steadily. b. fall steadily. c. fluctuate in a random-walk fashion. d. remain unchanged.
The relative price of a smartphone is
A) the money price of the smartphone divided by the money price of some other good. B) the price of the smartphone compared with what students think it should cost. C) the amount it cost to make the smartphone. D) what the company earned for selling the smartphone.