Refer to Figure 26-8. In the figure above, if the economy is at point A, the appropriate monetary policy by the Federal Reserve would be to
A) lower interest rates. B) raise interest rates.
C) raise income taxes. D) lower income taxes.
B
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Programs that automatically increase government spending (relative to revenue) during a recession and automatically decrease government spending (relative to revenue) during an economic boom are called:
a. discretionary fiscal policy. b. supply-side programs. c. automatic stabilizers. d. tax credits.
In chapter 20, the expected future nominal exchange rate in the long run say, Eet+n, is assumed to be the nominal exchange rate at which
A) the current account is in balance. B) the future rate of appreciation or depreciation is constant. C) domestic and foreign price levels are equal. D) one unit of foreign currency exchanges for one unit of domestic currency. E) none of the above