According to the monetarists, deliberate government intervention:
a. will stabilize the economy if the money supply is increased during recessions and decreased during expansions.
b. will effectively reduce the unemployment rate below its natural rate.
c. will stabilize the economy if the money supply is reduced during recessions and increased during expansions.
d. will destabilize the economy only if the government uses fiscal policy to change equilibrium income.
e. will destabilize the economy and cause a business cycle of its own, regardless of whether fiscal or monetary policy is used.
e
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Which of the following is an asset of the Fed?
A) Mortgage-backed securities B) currency C) reserves of depository institutions D) Both answers B and C are correct.
If there are short-run profits in a competitive industry, will firms enter or exit over the long run? At what point will the final equilibrium be achieved?
What will be an ideal response?