Economists are sharply divided over how to best fight the Great Recession. The majority of economists favor the "Stimulus Solution," which involves
A.
Relying on the invisible hand of the market to set things right
B.
Government actions to increase the total demand for output in the economy
C.
Making prices become more flexible so that equilibrium can be attained once more
D.
Stimulus from abroad through international trade and treaties
B.
Government actions to increase the total demand for output in the economy
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In the long run in the Keynesian model, a beneficial supply shock would leave the economy with a higher level of output, but also a ________ real interest rate and a ________ price level
A) higher; lower B) lower; higher C) lower; lower D) higher; higher
If the value of a dollar falls, then the quantity of money demanded
a. rises, meaning people want to hold more of their wealth in a liquid form. b. rises, meaning people desire to work more so their income rises. c. falls, meaning people want to hold less of their wealth in a liquid form. d. falls, meaning people want to work less so their income falls.