This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: Suppose policy makers implement a fiscal expansion that is not fully anticipated by financial market ... (Read 62 times)

lunatika

  • Hero Member
  • *****
  • Posts: 548
on: Jun 30, 2018
Suppose policy makers implement a fiscal expansion that is not fully anticipated by financial market participants. We know that this will
 
  A) always cause stock prices to fall.
  B) always cause stock prices to rise.
  C) tend to cause stock prices to rise if the LM curve is very flat.
  D) tend to cause stock prices to rise if the LM curve is vertical.

Question 2

When a liquidity trap situation exists, the most appropriate policy to increase output would be
 
  A) a central bank sale of bonds.
  B) an increase in government spending.
  C) a central bank purchase of bonds.
  D) none of the above


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

wilsonbho

  • Sr. Member
  • ****
  • Posts: 322
Reply #1 on: Jun 30, 2018
Answer to Question 1

C

Answer to Question 2

B


lunatika

  • Hero Member
  • *****
  • Posts: 548
Reply #2 on: Jun 30, 2018
Thank you


wilsonbho

  • Sr. Member
  • ****
  • Posts: 322
Reply #3 on: Jun 30, 2018
No problemo


« previous next »
 

Did you know?

Signs and symptoms that may signify an eye tumor include general blurred vision, bulging eye(s), double vision, a sensation of a foreign body in the eye(s), iris defects, limited ability to move the eyelid(s), limited ability to move the eye(s), pain or discomfort in or around the eyes or eyelids, red or pink eyes, white or cloud spots on the eye(s), colored spots on the eyelid(s), swelling around the eyes, swollen eyelid(s), and general vision loss.

Did you know?

In inpatient settings, adverse drug events account for an estimated one in three of all hospital adverse events. They affect approximately 2 million hospital stays every year, and prolong hospital stays by between one and five days.

Did you know?

Your skin wrinkles if you stay in the bathtub a long time because the outermost layer of skin (which consists of dead keratin) swells when it absorbs water. It is tightly attached to the skin below it, so it compensates for the increased area by wrinkling. This happens to the hands and feet because they have the thickest layer of dead keratin cells.

Did you know?

Throughout history, plants containing cardiac steroids have been used as heart drugs and as poisons (e.g., in arrows used in combat), emetics, and diuretics.

Did you know?

More than 50% of American adults have oral herpes, which is commonly known as "cold sores" or "fever blisters." The herpes virus can be active on the skin surface without showing any signs or causing any symptoms.

Greenstick Only one side of the shaft is broken, and the other is bent (like a greenstick); usually Greenstick Only one side of the shaft is broken, and the other is bent (like a greenstick); usually
Main Hall, Trajan's Market Main Hall, Trajan's Market
The effect of thermal expansion The effect of thermal expansion
International Economics: Theory and Policy (10th Edition) International Economics: Theory and Policy (10th Edition)
Suppose that we have a sample space with five equally likely experimental outcomes: E1, E2, E3, ... Suppose that we have a sample space with five equally likely experimental outcomes: E1, E2, E3, ...
Markets and Institutions Market Story Problem Markets and Institutions Market Story Problem
Video: Homologous chromosomes during prophase I - Animation

For a complete list of videos, visit our video library