A monopsony is an example of:
A. a buyer holding market power.
B. a seller holding market power.
C. an efficient market with no market power.
D. a single seller holding all market power.
A. a buyer holding market power.
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Starting from long-run equilibrium, a decrease in autonomous investment results in ________ output in the short run and ________ output in the long run.
A. lower; potential B. higher; higher C. higher; potential D. lower; higher
Refer to Figure 17-7. Consider the Phillips curves depicted in the graph above. The Fed announces its intention to decrease inflation from 10 percent to 5 percent per year, and it succeeds
If the assumptions of the rational expectations school hold true, and the Fed's announcement is credible, the rate of unemployment will be ________ in the short run. A) less than 5.5 percent B) 5.5 percent C) between 5.5 and 7.5 percent D) 7.5 percent
Decreasing returns to scale may occur as increasing the amount of inputs used
A) increases specialization. B) always increases the amount of output produced. C) may cause coordination difficulties. D) increases efficiency.
Under the rational expectations hypothesis, which of the following is the most likely long-run effect of a move to a more expansionary monetary policy?
a. higher prices and no change in real output b. higher prices and expansion in real output c. no change in prices but an expansion in real output d. no change in either prices or real output