If inventory stocks are low and firms have enough capital and labor to support an output increase,
A. monetary and fiscal policy will be very effective.
B. neither monetary nor fiscal policy will be effective.
C. fiscal policy will be effective, but monetary policy will be ineffective.
D. monetary policy will be effective, but fiscal policy will be ineffective.
Answer: A
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Which of the following statements is correct?
A. An increase in exports and an increase in imports will both tend to decrease the equilibrium real GDP. B. An increase in exports and an increase in imports will both tend to increase the equilibrium real GDP. C. An increase in exports will tend to decrease, and an increase in imports will tend to increase, the equilibrium real GDP. D. An increase in exports will tend to increase, and an increase in imports will tend to decrease, the equilibrium real GDP.
Refer to Figure 15-15. Why won't regulators require that Erickson Power produce the economically efficient output level?
A) because at the economically efficient output level, the marginal cost of producing the last unit sold exceeds the consumers' marginal value for that last unit B) because Erickson Power will earn zero profit C) because there is insufficient demand at that output level D) because Erickson Power will sustain persistent losses and will not continue in business in the long run
If an inflation forecast is based on expected monetary growth, it is likely to be
A) historical. B) rational. C) logical. D) adaptive.
According to the Monetarists, the primary cause of inflation is:
a. large budget deficits. b. high taxes. c. rapid expansion of the money supply. d. government expenditures that are large relative to the size of the economy.