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Author Question: If inventory stocks are low and firms have enough capital and labor to support an output increase, (Read 37 times)

tingc95

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Question 1

Provided that firms have sufficient capital and labor to support an output increase, monetary and fiscal policy are likely to be the most effective when


◦ prices and inventory stocks are both high.
◦ output and inventory stocks are both high.
◦ output is low and inventory stocks are low.
◦ output is low and inventory stocks are high.

Question 2

If inventory stocks are low and firms have enough capital and labor to support an output increase,


◦ monetary and fiscal policy will be very effective.
◦ fiscal policy will be effective, but monetary policy will be ineffective.
◦ monetary policy will be effective, but fiscal policy will be ineffective.
◦ neither monetary nor fiscal policy will be effective.


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Marked as best answer by tingc95 on Apr 19, 2019

AngeliqueG

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