Which of the following is true?
a. Keynesians argue that the crowding-out effect is rather insignificant.
b. Keynesians advocate increasing the money supply during economic recessions but decreasing the money supply during economic expansions.
c. Monetarists argue that the crowding-out effect is rather large.
d. Monetarists advocate increasing the money supply by a constant rate year after year.
e. All of the answers are correct.
e
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The problems with using the consumer price index as a measure of the cost of living are important because
a. even the appearance of high rates of inflation cause voters to become disenchanted. b. politicians have manipulated the measurement problems to their advantage. c. many government programs use the CPI to adjust for changes in the overall level of prices. d. if the price level is overstated, consumers will be taken advantage of by sellers of consumer goods.
Why is import substitution so popular as a development strategy in poor nations?
a. Domestic firms will be producing better products. b. It promotes free trade. c. It provides infant industries a protected market. d. It creates a competitive advantage for domestic firms.