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Mistimed contractionary fiscal policy can cause a real shock. rising interest rates. a recession. inflation. QUESTION 12 All else equal, an increase in savings will cause capital stock to increase.

Mistimed contractionary fiscal policy can cause a real shock. rising interest rates. a recession. inflation.

QUESTION 12 All else equal, an increase in savings will cause capital stock to increase. decrease. remain unchanged. increase and then decrease.

QUESTION 13 Intertemporal substitution tends to reduce the impact of positive shocks and increase the impact of negative shocks. reduce the impact of negative shocks and increase the impact of positive shocks. reduce the impact of positive shocks and negative shocks. increase the impact of positive and negative shocks.

QUESTION 14 What is a possible reason for the Fed's inability to prevent a recession? The Fed has too much power over M and M2 and can flood the money supply. Much of the data about the economy is unknown when the Fed is making policy. Firms and individuals do not often understand the goals of the Fed. The Fed often performs complex and conflicting maneuvers at the same time.

QUESTION 15 The problem associated with too much expansionary monetary policy is additional inflation. additional unemployment. higher interest rates. reduced economic growth.

Aug 19 2021 View more View Less

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