16. Business cycle deviations resulting in recessionary gaps and inflationary gaps representcoordination failures betweenProduction and pricesb. Prices and natural resource usec. Time and economic activityd. Labor and capital use17. According to Keynes, what is the most likely explanation for this coordination failure?a. Animal spiritsb. Excessive use of government and monetary policyc. Insufficiently defined property rightsd. Tariffs and other trade barriers18. Suppose monetary policy injects $75 billion of new reserves into a fractional reserve bankingsystem with a required reserve ratio of .15 (15%). What is the maximum increase in themoney supply possible from this policy?a. $500 billionb. $11.25 trillionc. $300 billiond. None of the above

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16. Business cycle deviations resulting in recessionary gaps and inflationary gaps represent coordination failures between a. Production and prices b. Prices and natural resource use c. Time and economic activity d. Labor and capital use

16. Business cycle deviations resulting in recessionary gaps and inflationary gaps represent coordination failures between a. Production and prices b. Prices and natural resource use c. Time and economic activity d. Labor and capital use

Economics Today and Tomorrow, Student Edition

1st Edition

ISBN:9780078747663

Author:McGraw-Hill

Publisher:McGraw-Hill

Chapter17: Stabilizing The National Economy

Section17.2: The Fiscal Policy Approach To Stabilization

Problem 3R

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