The proposed monetary rule that would specify how the Fed should respond to changes in GDP and inflation rates is called the:

Refer to Figure 13.1. All else equal, a decrease in government purchases would best be represented by a movement from

A) point A to point B. B) point B to point A. C) point B to point C. D) point C to point B.

A possible explanation for the persistence of the U.S. federal budget deficits is that: a. it is easier politically to increase government spending than to decrease taxes. b. it is easier politically to decrease government spending than to decrease taxes. c. it is easier politically to increase government spending than to increase taxes. d. the economy naturally tends toward recessions

e. the economy naturally tends toward full employment.