Active policy making refers to
A) actions taken by policy makers in response to or in anticipation of some change in the overall economy.
B) policy making that is carried out in response to a rule.
C) relying on policies that act as automatic stabilizers.
D) nondiscretionary policy making.
Answer: A) actions taken by policy makers in response to or in anticipation of some change in the overall economy.
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In periods of high inflation,
a. people want to hold on to as much money as possible. b. the purchasing power of money is decreasing. c. nobody wants to work and earn income. d. low nominal interest rates are likely to result. e. nobody wants to buy goods and services.
Assuming that resources are specialized, the opportunity cost of an item increases as production of it rises. Therefore, we expect that firms will produce more if
a. the price increases. b. the price decreases. c. the opportunity cost is greater than the price. d. government asks firms to produce more. e. the income of buyers increases.