Monetarists argue that government actions, particularly monetary policy, worsens the negative aspects of the business cycle
a. True
b. False
Indicate whether the statement is true or false
True
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If the MPC in an economy is 0.8, government could close a recessionary expenditure gap of $100 billion by cutting taxes by
A. $100 billion. B. $125 billion. C. $80 billion. D. $200 billion.
The "investment" component of aggregate demand will include all of the following except
a. expenditures of business firms on new plants. b. expenditures of business firms on new equipment. c. resales of existing physical assets. d. household spending on new homes.
According to the law of demand, the
A. quantity demanded of a good does not vary with price. B. quantity demanded of a good varies directly with price. C. quantity demanded of a good is negatively related to its price. D. quantity demanded depends on the quantity supplied.
Lola wants to make a 6% real return on a loan that she is planning to make, and the expected inflation rate during the period of the loan is 5%. She should charge an interest rate of
A. 1%. B. 6%. C. 11%. D. 16%.