Expansionary monetary policy is designed to stimulate the economy by increasing the money supply, but not create much inflationary pressure
Indicate whether the statement is true or false
TRUE
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The Taft-Hartley Act outlawed all of the following practices EXCEPT
A) secondary boycotts. B) union shops. C) closed shops. D) sympathy strikes.
The total value of government securities held by individuals, businesses, government agencies, and the Federal Reserve is known as
a. negotiable IOUs b. money market funds c. the deficit d. public debt e. general (private and public) debt
Price ceilings and price floors that are binding
a. are desirable because they make markets more efficient and more fair. b. cause surpluses and shortages to persist because price cannot adjust to the market equilibrium price. c. can have the effect of restoring a market to equilibrium. d. are imposed because they can make the poor in the economy better off without causing adverse effects.
Sometimes the government deals with externalities by creating laws to regulate behavior instead of using taxes to correct the market failure. So, requiring auto manufacturers to install a device called a catalytic converter which removes some toxins from exhaust may be preferable to a gas tax that reduces driving levels. This route is often preferred because:
A. the cost of the externality is unknown. B. it requires less technological development. C. it more heavily penalizes drivers who consume more gas than those who consume less. D. only car drivers pay for the externality.