According to the policy irrelevance proposition, real Gross Domestic Product (GDP) is determined by
A) the economy's long-run aggregate supply curve.
B) a combination of fiscal policy and monetary policy.
C) the rate of inflation only.
D) the economy's aggregate demand curve.
A
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Consider the market for feather pillows. If there is an increase in the price of feather dusters, a substitute in production for feather pillows, then
A) there is a downward movement along the demand curve for feather pillows. B) the supply curve for feather pillows shifts leftward. C) the price of feather pillows decreases. D) the demand curve for feather pillows shifts rightward. E) the demand curve for feather pillows shifts leftward.
A repurchase agreement of government securities by the Fed
A) permanently increases bank reserves. B) temporarily increases bank reserves. C) permanently reduces bank reserves. D) temporarily reduces bank reserves.
According to the text, critics point out that the costs incurred by firms due to regulations
A. lower production costs to the shutdown point. B. reduce taxes too far. C. increase production costs. D. none of these.
A ________ industry has a relatively small number of firms that dominate a market.
A. monopolistically competitive B. Cournot C. contestable D. concentrated