Consider the following statement, "The Federal Reserve fights recessions by increasing the money supply so people will have more money to spend." What is wrong with the statement and how can it be corrected?
What will be an ideal response?
The Federal Reserve fights recessions by increasing the money supply to lower interest rates, which in turn increases spending. It is not that people will have more money to spend, but that interest rates will be lower, which stimulates spending.
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You are given the following budget data for a country that has both a central government and local governments
(a) How much is the deficit for the central government, the local government, and the total of the central and local governments? (b) How much is the primary deficit for the central government, the local government, and the total of the central and local governments?
The process of entry and exit into a monopolistically competitive market continues until:
A. profits are positive. B. profits are zero. C. profits are negative. D. Any of these statements could be true.