The Phrase "You Can't Push on a String" Is

question 2

Multiple Choice

The phrase "You can't push on a string" is

• A) a line from a 1930s song.
• B) used to suggest that monetary policy can make money available but cannot ensure it will be spent.
• C) an analogy used by monetarists to describe the ineffectiveness of fiscal policy.
• D) used by rational expectations theorists in their criticisms of supply-side economics.
• E) a reference to the fact that Congress is in control of the government's purse strings and determines spending without regard to economic impact.

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Definitions:

Specialization

The process of focusing on and becoming expert in a particular subject or skill.

Production

The process of creating goods and services by combining labor, land, and capital to generate output.

Comparative Advantage

A person's, corporation's, or country's capability to manufacture a good or provide a service with a smaller opportunity cost than that of its competitors.

Absolute Advantage

The ability of a party to produce a greater quantity of a good, product, or service than competitors, using the same amount of resources.