A) only taxes a household on the money it spends.
B) discourages saving.
C) would likely result in a lower level of saving than an income tax.
D) ultimately taxes income twice - once when the household pays income tax and once when the household makes a purchase.
F) A) and D)
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A) leads people to use more resources to reduce money holdings. There is no way it can make labor markets work more efficiently.
B) leads people to use more resources to reduce money holdings. However, it can make labor markets work more efficiently.
C) leads people to use fewer resources to reduce money holdings. There is no way it can make labor markets work more efficiently
D) leads people to use fewer resources to reduce money holdings. However, it can make labor markets work more efficiently.
F) C) and D)
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A) aggregate demand and aggregate supply
B) aggregate demand but not aggregate supply
C) aggregate supply but not aggregate demand
D) neither aggregate demand nor aggregate supply
F) B) and C)
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B) False
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Some programs, such as Social Security, ...View Answer
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Central banks sympathetic to i...View Answer
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First, the returns to saving are heavily...View Answer
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A) increase the money supply, which causes output to move closer to its long-run equilibrium.
B) increase the money supply, which causes output to move farther from long-run equilibrium.
C) decrease the money supply, which causes output to move closer to its long-run equilibrium.
D) decrease the money supply, which causes output to move farther from long-run equilibrium.
F) A) and D)
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A) If aggregate demand shifts right from long-run equilibrium, this rule unambiguously implies that the Fed increases the nominal interest rate.
B) If aggregate supply shifts right from long-run equilibrium at the inflation target, we cannot tell without more information whether the Fed should increase or decrease the nominal interest rate.
C) If output is at its natural level, but inflation is above its target, the Fed must increase the nominal interest rate.
D) If inflation is at its targeted level, but output is above its natural rate, the Fed must decrease the federal funds rate.
F) A) and B)
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A) Government debt imposes higher taxes or more borrowing on future generations.
B) A balanced budget will smooth the business cycle.
C) Deficits lower national saving.
D) Recent history shows that Congress will run deficits even when deficits are not justified by war or recession.
F) None of the above
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A) the short-run Phillips curve shifts right, and unemployment will rise by more than otherwise.
B) the short-run Phillips curve shifts right, and unemployment will rise by less than otherwise.
C) the short-run Phillips curve shifts left, and unemployment will rise by more than otherwise.
D) the short-run Phillips curve shifts left, and unemployment will rise by less than otherwise.
F) None of the above
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A lag of six months ...View Answer
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