38. Say\'s Law states that A) Supply creates its own demand. B) Shifts of either

Question

38. Say's Law states that A) Supply creates its own demand. B) Shifts of either supply or demand can achieve a given market equilibrium. C) Wages and prices are inflexible, which prevents the achievement of a market equilibrium D) Increased prices lead to increased supply. 39. A tax cut can best be characterized as: A) Monetary policy only. B) Fiscal policy only. C) Supply-side policy only. D) The best thing since sliced bread 40. Keynes argued that the level of economic activity is predominantly determined by the level of: A) Aggregate supply. . B) Aggregate demand. C) Unemployment. D) Interest rates 41. Consumption is defined as expenditures by A) Consumers on final goods and services. B) Government on final goods and services C) Businesses on final goods and services D) All of the above 42. Fiscal policy is: A) An internal market force. B) A macroeconomie outcome. C) The use of budget levers to influence the macro economy. D) The use of bananas to stimulate the economy 43·The use of government taxes and spending to alter economic outcomes is known as: A) Monetary policy. B) Fiscal policy. C) Income policy. D) Foreign-trade policy 44. The control of the money supply by the Federal Reserve System is known as: A) Fiscal policy B) Monetary policy C) Supply-side policy D) Congressional policy

Explanation / Answer

38) A; supply creates its own demand

39) B; fiscal policy only

40) B; aggregate demand

41) A; consumers on final goods and services

42) C; the use of budget levers to influence the economy

43) B; fiscal policy

44) B; monetary policy

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