When the economy suffers a permanent negative supply shock and the central bank responds by changing the autonomous component of monetary policy to keep inflation at the target inflation rate, then
A) aggregate demand curve shifts leftward.
B) aggregate demand curve shifts rightward.
C) output will be unchanged.
D) both A and C.
A
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Lucy works as a college instructor for a fixed annual salary of $30,000. She is considering quitting this job and becoming a real estate broker
Lucy believes that as a realtor she has a 40 percent chance to make $60,000 per year and a 60 percent chance to make $25,000 a year. The figure above shows Lucy's total utility of wealth curve (U). Lucy will decide to ________ and she will definitely make this choice because it gives her a greater expected ________. A) keep her current job; income B) keep her current job; utility C) quit her job and become a realtor; utility D) quit her job and become a realtor; income
According to the Taylor rule, the Fed should raise the federal funds interest rate when inflation ________ the Fed's inflation target or when real GDP ________ the Fed's output target
A) rises above; drops below B) drops below; drops below C) rises above; rises above D) drops below; rises above
A rational person will NEVER consume a product when its
A) marginal utility is negative. B) total utility is increasing at a decreasing rate. C) marginal utility is decreasing. D) total utility is decreasing at an increasing rate.
A public good is ________ and ________.
A) excludable; nonrival B) nonexcludable; rival C) excludable; rival D) nonexcludable; nonrival