Policies to create jobs in the nation are the concern of:
a. macroeconomics.
b. microeconomics.
c. both microeconomics and macroeconomics.
d. neither microeconomics nor macroeconomics.
a
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If there is an inflationary gap, what is the proper monetary policy to restore price stability? What actions can the Fed undertake to restore price stability?
What will be an ideal response?
Consider the two graphs above. Suppose there is increased concentration in the retail sector (that is, fewer, larger companies). This would ________ the desired level of inventories, as depicted in graph ________
A) increase; B B) increase; A C) decrease; B D) decrease; A
If future price changes were perfectly anticipated by both borrowers and lenders, then _____
a. the expected real interest rate would be higher than the actual rate b. the expected real interest rate would lower than the actual rate c. the real interest rate in the future would decrease by the amount of the price increase d. the real interest rate in the future would increase by the amount of the price increase e. the real interest rate in the future would remain unchanged
The proponents of rational expectations believe that
a. there will be a substantial time lag before people anticipate the eventual effects of a shift to a more expansionary macro-policy. b. macro-policies that stimulate demand and place upward pressure on the general level of prices will temporarily increase output and employment. c. the inflationary side effects of expansionary policies will be anticipated quickly, and therefore, even their short-run effects on real output and employment will be minimal. d. discretionary changes in macro-policy can be made in a manner that will reduce the economic ups and downs of a market economy.