Mainstream economists contend that, as stabilization tools:
A. discretionary fiscal policy is effective, but discretionary monetary policy is not.
B. discretionary monetary policy is effective, but discretionary fiscal policy is not.
C. both discretionary fiscal policy and discretionary monetary policy can be effective if
appropriately used.
D. discretionary fiscal policy and discretionary monetary policy cause more instability than
they cure.
C. both discretionary fiscal policy and discretionary monetary policy can be effective if
appropriately used.
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Over time in a growing economy, the long-run aggregate supply curve will
A) become horizontal at the long-run potential price level. B) shift rightward. C) shift leftward. D) become increasingly steep.
Loans by the Federal Reserve to banks are known as
A) repurchase agreements. B) Federal funds. C) discount loans. D) cash items in the process of collection.