Question

6. When the Federal Reserve Bank changes the money supply and interest erve Bank changes the money supply and interest rates to affect the economy, this is called and it's a policy. a fiscal policy, Keynesian b. growth policy: Classical c. monetary policy: Classical d. monetary policy, Keynesian 7. An example of a long run Classical policy to increase potential GDP is a. the Federal Reserve implementing monetary policy to get the economy out of recession b. the government subsidizing job training programs to reduce structural unemploy c. the President and Congress changing taxes to reduce cyclical unemployment d. the government placing price ceilings on expensive goods and services 8. What is one reason that prices might be sticky in labor markets? a. because of the invisible hand b. because labor markets are a resource market c. because there are too many workers going after the same job d. because of labor contracts 9. A Keynesian economist's response to the Great Recession of 2008 would be to recommend a. monetary policy b. laissez faire policy c. long run growth policy d. no policy policy in the 10. Classical economists advocate for a. Fiscal; short run b. Monetary, short run c. Laissez Faire; long run d. Laissez Fair, short run issue while the business cycle is considered a 11. Potential GDP is considered a issue. a. short run; long run b. long run; short run c. microeconomic, macroeconomic d. macroeconomic; microeconomic can prevent markets from reaching equilibrium. 12. According to the Keynesian model, a. sticky prices b. flexible prices c. surpluses d. shortages policy for the 13. Laissez Faire policy is the a. Classical; short run b. Keynesian; short run c. Classical; long run d. Classical; short run and long run

Answer 1

6. When the federal reserve Bank changes the money supply and interest rate to affect the economy, this is called monetary policy and it's a Keynesian policy.

Answer: option D