It can be shown using the IS-LM-FX model that a temporary expansion in the supply of money is effective in:
A) raising rates of interest.
B) raising the rate of unemployment.
C) combating temporary downturns in the economy.
D) increasing consumer confidence.
Ans: C) combating temporary downturns in the economy.
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Suppose that the wage for drive-thru clerks is $7 an hour at Burger King and $6.50 at McDonald's. The jobs are alike in all other respects. We would expect
a. an increase in the supply of and demand for drive-thru clerks at Burger King b. an increase in the supply and a decrease in the demand for drive-thru clerks at Burger King c. a decrease in the supply of drive-thru clerks at Burger King but no change in demand d. an increase in the supply of drive-thru clerks at Burger King but no change in demand e. a decrease in the supply of and demand for drive-thru clerks at Burger King
Government spending does not reallocate resources away from private uses when the economy is at full employment
Indicate whether the statement is true or false