Proponents of monetary policy based on fixed rules base their position on the assumption of a vertical aggregate supply curve.
a. true
b. false
a. true
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Personal consumption expenditures are the largest component of GDP
a. True b. False Indicate whether the statement is true or false
Answer the next question on the basis of the following information about the opportunity costs of two products-fish (F) and chicken (C)-in countries Singsong and Harmony. Assume that production occurs under conditions of constant costs and these are the only two nations in the world. Finally, the opportunity costs of fish in terms of chicken are: Singsong: 1F = 2C. Harmony: 1F = 4C If these two nations specialize based on comparative advantage, then
A. Singsong will produce chicken and Harmony will catch fish. B. Harmony will both produce chicken and catch fish. C. Singsong will both produce chicken and catch fish. D. Harmony will produce chicken and Singsong will catch fish.
Suppose a perfectly competitive industry is in long-run equilibrium. If a decrease in demand leads to a higher long-run price, we know that
A) this is a decreasing-cost industry. B) this is an increasing-cost industry. C) some firms will be losing money in the long run. D) after further adjustments, price will fall to its original level.
Economists believe that an increase in equilibrium income can eliminate a cyclical deficit but cannot eliminate a structural deficit.
Answer the following statement true (T) or false (F)