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In the mainstream view, the crowding-out effect from the use of fiscal policy is


A) small, especially during a recession.
B) large, especially during a recession.
C) large because the velocity of money is high.
D) small because the velocity of money is low.

E) B) and C)
F) A) and B)

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In 2012, the Fed adopted a flexible version of


A) a monetary-growth rule.
B) inflation targeting.
C) a balanced-budget policy.
D) a do-nothing approach.

E) A) and C)
F) All of the above

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Mainstream economists think that the best way to stabilize the economy is to shift aggregate supply.

A) True
B) False

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Mainstream economists favor


A) the use of discretionary monetary policy and fiscal policy.
B) a monetary rule.
C) a balanced-budget amendment.
D) wage and price controls.

E) B) and D)
F) A) and C)

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In the monetarist equation of exchange, MV is the monetarist counterpart of


A) money supply.
B) aggregate expenditures.
C) total saving.
D) government spending.

E) A) and B)
F) B) and D)

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