Refer to Figure 12.2. Suppose the economy is initially above potential GDP, and the actual inflation rate is greater than the expected inflation rate. If the Fed wants to achieve the goal of price stability, this would be represented by a
A) shift from IS1 to IS2.
B) shift from IS2 to IS1.
C) shift from MP1 to MP2.
D) shift from MP2 to MP1.
C
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When demand is elastic, marginal revenue is
A) positive. B) negative. C) zero. D) increasing as output increases. E) undefined.
Three basic decisions must be made by all economies. What are they?
What will be an ideal response?
The "future value" of a sum of money refers to:
A. the estimated value of that money invested in a stock portfolio at some future date. B. the purchasing power of a given amount of money adjusted for price changes. C. today's value of a sum of money to be received in the future. D. the amount to which some current sum of money will grow over time.
Discuss the problem of clear benefits and hidden costs related to government programs. Why can it result in inefficiency?
Please provide the best answer for the statement.