Monetization of the deficit (or debt) means that
a. the government uses monetary policy to control the economy rather than fiscal policy.
b. inflation accounting corrects for price increases.
c. the Fed buys newly issued debt and increases the money supply.
d. the amount of money in circulation is equal to the size of the debt.
c
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Price elasticities are calculated for four goods, and the values are: 4.5; 3.7; 1.0; 0.2. Which price elasticity is most elastic?
A) 4.5 B) 3.7 C) 1.0 D) 0.2
The mathematical equation: quantity of output supplied = natural rate of output + a(actual price level - expected price level), expresses
a. how the long run equilibrium adjusts to changes in money supply. b. how output deviates in the short run from its long run natural rate. c. how the short run aggregate supply curve shifts. d. how adverse shifts in aggregate supply can cause stagflation.