The interest rate target emphasized in recent Federal Open Market Committee press releases is the
A) discount rate.
B) prime rate.
C) federal funds rate.
D) equilibrium rate.
C
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In the classical model, an increase in aggregate demand will lead to an increase in wage rates while a decrease in aggregate demand will
A) change the price of capital. B) leave wages unchanged since workers will not take a cut in pay. C) increase wages since business will be desperate for labor. D) decrease wages.
When a supply shock is permanent
A) both the long-run and short-run aggregate supply curves shift leftward. B) there are no shifts in either the long-run or short-run aggregate supply curve. C) only the long-run aggregate supply curve shifts leftward. D) only the short-run aggregate supply curve shifts leftward.
The figure above shows the market for coffee. If more coffee plantations are planted in Brazil and Vietnam so that the supply of coffee increases, the efficient quantity of coffee will ________ and the consumer surplus will ________
A) increase; increase B) increase; decrease C) decrease; decrease D) decrease; increase
Government can
a. Create wealth by not interfering in the markets in any way what so ever b. Not affect wealth in the markets c. Create wealth by enforcing property rights and contracts d. Create wealth by making choice decisions for the market