When interest rates are artificially lowered through expansionary monetary policy,
1. When interest rates are artificially lowered through expansionary monetary policy,
a) longer-term investment projects appear to be more profitable, and production of capital goods increases.
b)the economy experiences an unsustainable boom phase.
c)the economy will likely fall into a recession in the longer run.
d) all of the above tend to occur.
2.The democratic political process is weighted in a manner that favors
contractionary over expansionary fiscal and monetary policies because changes in aggregate demand tend to affect output before they affect the price level. | ||
contractionary over expansionary fiscal and monetary policies because changes in aggregate demand tend to affect the price level before they affect output. | ||
expansionary over contractionary policies because changes in aggregate demand tend to affect the price level before they affect output. | ||
expansionary over contractionary policies because changes in aggregate demand tend to affect output before they affect the price level. |
3. Which of the following is NOT one of the three primary ways that a manufacturer could use extra profits earned from implementing a new cost-saving machine?
Expand operations by buying more machines to produce more output | ||
Invest the profits in some other industry | ||
Spend the extra profits on increasing his personal consumption | ||
All of the above are ways that extra profits could be used |
In: Economics