Practice Quiz 5 Answers

Practice Quiz 5 Answers

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Unformatted text preview: was running a trade deficit and this would result in an inflow of gold and a decrease in the money supply b. the US was running a trade surplus and this would result in an inflow of gold and a decrease in the money supply c. the US was running a trade deficit and this would result in an outflow of gold and a decrease in the money supply d. the US was running a trade surplus and this would result in an outflow of gold and a decrease in the money supply take it in two parts - the trade deficit would create an outflow of gold - and the outflow would decrease the money supply 7. One of the things that has always surprised students is the behavior of policy makers at the outset of the Great Depression when the Fed raised interest rates and the government raised taxes? These are not the policies most expected to see - and not what you hear about today when the economy slips in a recession - but at that time the policies were rooted in the prevailing Classical model. Based on the Classical model attempts to alter output in the short run with monetary and fiscal policy would be ineffective. According...
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This document was uploaded on 03/01/2014 for the course ECN 202 at Rhode Island.

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