Which of the following is part of the synthesis view of fiscal policy?
a. Automatic stabilizers offset some of the fluctuations in aggregate demand without any government action.
b. Fiscal policy is much less potent than the early Keynesian view implied.
c. The effectiveness of discretionary fiscal policy as a stabilization tool is highly questionable given the difficulties in proper timing.
d. All of the above are correct.
e. None of the above is correct.
D
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When economists study the behavior of sellers, they are studying:
A) supply. B) the role of government. C) demand. D) accounting.
Refer to Figure 17-2. Suppose the economy is at point B in the figure above. Which of the following is true?
A) The economy is producing at potential GDP. B) The current unemployment rate is 5%. C) Expected inflation and actual inflation are the same. D) The expected rate of inflation is 3%. E) The natural rate of unemployment is 3.8%.