The Fed’s quick response to the threat to the economy after September 11, 2001, makes a strong case for
A. a rules-based monetary policy regime.
B. a discretionary-based monetary policy regime.
C. the superiority of fiscal policy.
D. the dominant role of Congress in activist policy.
Answer: B
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The above figure shows the demand curve for crude oil. If the market price is $10 a barrel, what is the price elasticity of demand?
A) -.02 B) -1 C) -10 D) -500
The economy will move to a point on the short-run Phillips curve where unemployment is higher if
a. the inflation rate decreases. b. the government increases its expenditures. c. the Fed increases the money supply. d. None of the above is correct.
An economic naturalist is someone who:
A. studies the process of natural selection in a cost-benefit framework. B. has an innate talent for using economic concepts. C. applies economic insights to understand everyday life. D. uses economic arguments to protect the environment.
A major reason for the existence of inflationary and deflationary gaps is that
A. corporations do most of the nation’s saving. B. saving and investing are done by people with no social conscience. C. consumers do most of the nation’s saving. D. saving and investing are done by different groups.