Question Details

Are too many Americans at work these days for the economy's own good 



1. "Even some Fed critics are reluctant to change its structure. Mr. Feldstein warns that "substituting political judgements for economic judgements brings a built-in bias toward ______." 
The blank is most appropriately filled with 
a) the rich b) inflation c) high taxes d) unemployment 
2. "It is economists who repeat their own mistakes, because their calculations are looking at the world through a rearview mirror. Business leaders describe the change in two words: productivity and competition. Both, they say, wring out inflation and enable them to increase production and hire more people without raising wages, and without putting pressure on their own prices." This economists mistake during the late 1990s is economists belief that 
a) fiscal policy sets a multiplier process in motion 
b) inflation will increase if the money growth rate increases 
c) if unemployment falls below the NRU inflation will increase 
d) increases in our standard of living are caused by productivity increases 
3. "Are too many Americans at work these days for the economy's own good ? Absolutely, says Martin Feldstein, former head of the Council of Economic Advisors. By his calculations, unemployment has already fallen way below the level he believes is sure to trigger ______" The blank is best filled by 
a) a recession b) rising inflation c) rising tax rates d) a budget deficit 
4. “George W. Bush- $168 billion tax rebate plan of February of 2008 was designed to stimulate the U.S. economy, but it didn’t work, and so instead ……” This statement is best completed with 
	taxes were raised back to their original level 
	government spending was increased 
	a stimulating monetary policy was adopted 
	both b) and c) 

5. “United States inflation expectations are quite well anchored, giving the Federal Reserve Board breathing room for further possible rate cuts.” The rationale behind this statement is that in this circumstance rate cuts will 
	not affect inflation expectations and will lower unemployment 
	create higher inflation expectations and higher unemployment 
	lower inflation expectations and lower unemployment 
	raise inflation expectations and lower unemployment 


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