Which of the following is an advantage of monetary policy?
A) It is faster to implement than fiscal policy.
B) It acts more directly upon aggregate demand than fiscal policy.
C) It is not subject to multiplier effects.
D) It is unlikely to create inflation.
Question 2
Certain kinds of tropical fruits are impossible to grow outdoors in the United States. Suppose, however, that in order to create jobs in Wyoming, the U.S. government offered extensive subsidies to firms to produce bananas. With the subsidies, firms could build greenhouses and offer the fruit at world prices.
A) The United States now has a comparative advantage in bananas.
B) The United States has a comparative advantage, but is not competitive.
C) The United States is competitive, but does not have a comparative advantage.
D) The United States has a comparative advantage and is competitive.
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