In the short-run macro model, the change in inventories will
a. equal output minus aggregate expenditures
b. trigger a price change
c. equal investment minus depreciation
d. equal sales minus investment
e. be matched by an equal and opposite change in the subsequent period
A
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Which of the following is an advantage of automatic stabilizers?
A) The lag for automatic stabilizers is relatively long. B) It is much easier to measure the impact of automatic stabilizers compared to the impact of discretionary fiscal policy. C) There is no administrative cost to implementing automatic stabilizers. D) Because they affect disposable personal income directly, automatic stabilizers act swiftly to reduce the degree of changes in real GDP.
Refer to Table 15-6. Suppose the table above illustrates the values of real and potential GDP and the price level if the Fed does not vote to change their current policy to be more contractionary or expansionary
If the Fed wants to keep real GDP at its potential level in 2017, should the Fed use a contractionary or expansionary policy? Should it raise or lower its interest rate target? How should it conduct open market operations to achieve its goal?