Keynes was motivated to create a macroeconomic theory different from classical theory because
A) he believed in government intervention in the economy.
B) he believed in the idea of the invisible hand.
C) monetary policy was more important than the classicals acknowledged.
D) classical theory was inconsistent with the data in the Great Depression.
D
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In recent years, the Fed has chosen to target interest rates rather than the money supply because
a. Congress passed a law requiring them to do so. b. the President requested them to do so. c. the money supply is hard to measure with sufficient precision. d. changes in the interest rate change aggregate demand, but changes in the money supply do not.
Suppose economic stability in the United States increases. This will tend to cause which of the following to occur?
A) The demand for U.S. dollars will rise in the foreign exchange market. B) The supply of U.S. dollars will rise in the foreign exchange market. C) The demand for euros will rise in the foreign exchange market. D) Nothing will change in the foreign exchange market.