If Policy Makers Wanted to Use Both Monetary and Fiscal

question 6

Multiple Choice

If policy makers wanted to use both monetary and fiscal policy to stimulate demand and reduce a high rate of unemployment, which of the following would be most appropriate?

• A) a larger budget deficit and the purchase of securities in the open market
• B) a government surplus and the sale of securities in the open market
• C) a larger government deficit and an increase in the discount rate
• D) a government surplus and a reduction in the discount rate

Understand the concept of utility functions and how they represent preferences in economics.

Learn how to construct and interpret Edgeworth boxes for various economic scenarios.

Identify Pareto optimal allocations and understand the conditions under which they occur.

Analyze the impact of initial allocations on the determination of competitive equilibrium prices and consumptions.

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Definitions:

Judicial Review

The power of courts to assess the constitutionality of laws and decisions made by legislative and executive bodies.

Consent Orders

Legal agreements approved by a judge or authorized legal body, which settle a dispute between two parties without a verdict.

Highly Regulated

Describes industries or sectors subject to extensive rules, laws, and guidelines set by government bodies.

Courts Scrutinized

refers to the thorough examination or review by courts of legal cases, documents, or practices to ensure legality and fairness.