If monetary policymakers respond aggressively to current inflation above the target inflation rate, the:
A. dynamic aggregate demand curve would have a steep slope.
B. monetary policy reaction curve would have a positive and steep slope.
C. monetary policy reaction curve would be flat.
D. dynamic aggregate demand curve would shift rightward.
Answer: B
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Refer to Figure 9.1. If the market is in equilibrium, total consumer surplus is
A) $30. B) $70. C) $400. D) $800. E) $1200.
A shift in the supply curve of bicycles resulting from higher steel prices will lead to
a. higher prices of bicycles. b. lower prices of bicycles. c. a shift in the demand curve for bicycles. d. larger output of bicycles. e. no change in the price of bicycles.
In an open economy, the domestic real interest rate is determined by:
A. domestic investment. B. domestic saving and net capital inflows. C. domestic saving and domestic investment. D. domestic saving, domestic investment, and net capital inflows.
An argument in favor of free trade is that trade barriers prevent a nation from reaping the benefits of specialization.
Answer the following statement true (T) or false (F)