When expectations are rational,
a. a foreseen expansionary policy action does not alter output.
b. there cannot be any inflation.
c. a foreseen expansionary policy action changes output.
d. there is zero unemployment.
A
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________ adopts the view that aggregate fluctuations are a natural consequence of an expanding economy
A) The new macroeconomics B) The Okun Gap C) Keynesian economics D) The Lucas Wedge E) Classical macroeconomics
Assume that the actual inflation rate is 3 percent, the target inflation rate is 2.5 percent, and that the percentage difference between actual and potential real GDP is 1 percent
According to the Taylor rule, the federal funds rate target should be A) 3.25 percent. B) 5.75 percent. C) 6.25 percent. D) 5.50 percent.
The following graph shows the production possibilities curve for the economy with only two members, Silvia and Art. Silvia can produce either 50 pounds of beef or 2 computers per week, and Art can produce 100 pounds of beef or 1 computer per week. Both of them work 40 weeks per year.
Art's opportunity cost of producing one pound of beef is ________ computer(s).
A. 100 B. 50 C. 1/100 D. 1/50
If a firm has already paid or has agreed to pay for something, we that cost:
A. a fixed cost. B. a spent cost. C. a sunk cost. D. a lost cost.