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The government has the ability to influence the level of output in the short run using monetary and fiscal policy. There is some disagreement as to whether the government should attempt to stabilize the economy. Which of the following statements about the debate over stabilization policy are correct?
a. Advocates of active stabilization believe that implementation lags for fiscal and monetary policy do not exist.
b. Advocates of active stabilization policy believe that the government can adjust monetary and fiscal policy to counteract waves of excessive optimism and pessimism among consumers and businesses.
c. Advocates of active stabilization believe that automatic stabilizers have no effect on aggregate demand.
d. Opponents of active stabilization believe that active fiscal and monetary policies have no effect on aggregate demand.
The record of economic growth over the past century does not represent the steady state described or predicted in the Solow growth model. Explain what the “Solow residual” is and how it is used to account for the long-term improvement in output per p..
Assume that the banking system is loaned up and that any open-market purchase by the Fed directly increases reserves in the banks. If the required reserve ratio is 0.2, by how much could the money supply expand if the Fed purchased $2 billion worth o..
q1. select two products or services with which you are familiar - one produced in the u.s. and the other produced in
What do you think businesses and other organizations in economic markets should do in order to make capitalism more sustainable and why?
Consider an environment where an agent could be either employed E or unemployed U. Let’s normalize E + U = 1, so that E and U are interpreted as the fraction of people employed and unemployed at any given point in time, respectively. What is the prob..
illustrate what is the new equilibrium price and quantity. Compute the equilibrium price and quantity in this market.
The owner/manager of an athletic shoe store has revenue of $260,000 per year and labor, interest, inventory, and miscellaneous expenses of $200,000. The owner also owns the building the store is located in. What and how much are the store owner’s imp..
Suppose Alan’s preferences are described by the utility function: Find Alan’s MRS. Find the equation for Alan’s indifference curve through the bundle (3, 6).
If LFC sells chicken and biscuits as a meal deal, what price would be set for the meal deal which comprising both an order of chicken and an order of biscuits
On September 21, 1995, "House Speaker Newt Gringrich threatened to send the US into default on its debt for the first time in the nation's history, to force the Clinton Administration to balance the budget on Republican terms. That same day, the inte..
A manufacturer can sell 400 watches for $11 each and 800 watches for $6 each. Find a demand and price equation assuming the relationship is linear. p Dq = = ( ). Find the quantity demanded at $10 per watch.
Decide on the next steps based on the events that took place. What makes this next step the best decision?
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