While Keynesians and supply-siders agree that stabilization policy can affect levels of unemployment and inflation, they disagree over
a. how much taxes should be cut
b. how much government spending should be increased
c. how monetary policy should be used
d. how consumers spend their tax reductions
e. whether aggregate demand or aggregate supply is the critical variable
E
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Compared to the natural rate of unemployment, the actual unemployment rate is
A) always lower. B) always higher. C) always the same. D) higher in periods when GDP fails to grow at its normal rate.
A discount shoe manufacturer's advertisement suggests that they are almost as good as the name brands but better value. The shoe manufacturer believes that the advertisement will
a. Make the demand for its product more elastic b. Make his customers more price sensitive c. Cause people to directly compare his product to the name brands d. All of the above