Suppose that real GDP falls to 2 percent below potential GDP. Then, according to the Taylor rule, the Fed should reduce the federal funds, relative to the current rate of inflation, by:
A. ½ percentage point.
B. 1 percentage point.
C. 2 percentage points.
D. 4 percentage points.
B. 1 percentage point.
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The standard deduction for two individuals is higher than the standard deduction for a married couple, causing a "marriage tax."
A. True B. False C. Uncertain
In deriving the demand schedule for a good, economists assume that
A) consumers have equal incomes to allocate among goods. B) a consumer will allocate all of her income to one good. C) all other influences on demand except the product price are held constant. D) reported income changes at each point on the demand schedule.
Which of the following is a possible difference between health care and other products? a. The demand curve for health care may be steeper than the demand curve for other products
b. The demand curve for health care is a horizontal line, whereas the demand curve for other products is downward sloping. c. The supply curve for health care is fixed, whereas the supply curve of other products change with a change in its determinants. d. The demand for health care is positively related to price, whereas the demand for other products is inversely related to price. e. The supply of health care is inversely related to price whereas the supply of other products are positively related to price.
Which of the following is a monetary policy action?
A. Deregulation. B. Changes in transfer payments. C. Open market operations. D. Changes in government spending.