Advocates of stabilization policy prefer quick medicine for economic ills. This leads some observers to favor fiscal policy while others endorse monetary policy. Describe the positions of each side in the debate and what seems to be the current consensus
Fiscal policy advocates argue that fiscal policy works more quickly on aggregate demand and that monetary policy only works indirectly through interest rates and investment spending. Monetary policy advocates emphasize the political nature of fiscal policy, which means that fiscal policy has very long lags between recommendation and action. In the current, rather confrontational and divided political atmosphere, most analysts agree that monetary policy may be the "only game in town."
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Between 1965 and 1972, eight major pieces of consumer-protection legislation were enacted. This burst of legislative activity was largely driven by
a. increased public fears following the thalidomide tragedy. b. public outcry following a series of steamboat explosions. c. a general lack of faith in the market. d. widespread support for the "Reagan Revolution.".
What would be the profits for Irene's Dairy in equilibrium?
a. 5 million loss b. 5 million c. 10 million d. 20 million