Economists who favor activist monetary policy argue that
A) the economy does not always equilibrate quickly enough at the Natural Real GDP or full-employment output and therefore needs help.
B) activist monetary policy is effective at smoothing out the business cycle.
C) activist monetary policy is flexible and flexibility is a desirable quality in monetary policy.
D) a and b
E) a, b and c
E
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Because a competitive firm is a price taker, it faces a demand curve that is:
a. perfectly inelastic. b. relatively inelastic. c. relatively elastic. d. perfectly elastic.
If the government decides to build highly subsidized dorms for all college students, then we will see
a. an upward movement along the AD curve b. a downward movement along the AD curve c. the AD curve shift to the left d. the AD curve shift to the right e. the AS curve shift to the right