Suppose the economy is at full employment and firms become more optimistic about the future profitability of new investment. Which of the following will happen in the short run?
A) Unemployment will decline.
B) The aggregate demand curve will shift to the left.
C) Output will decline.
D) Prices will decline.
A
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Contractionary monetary policy should be used if:
A) aggregate demand-aggregate supply equilibrium is below potential output. B) aggregate demand-aggregate supply equilibrium is above potential output. C) aggregate demand-aggregate supply equilibrium is equal to potential output. D) none of the above.
After the inflation of the Johnson-Nixon-Ford years (1963–1976), the Carter Administration, while still inflationary, managed to slow down the rate of advancing prices
Indicate whether the statement is true or false
In the above figure, which of the following statements is FALSE if the firm is operating at output level Q2?
A. Average costs would be lowered by expanding output. B. Economic profits are positive. C. The price is lower than at an equivalent firm forced by regulators to charge ATC pricing. D. The output is equivalent to an unregulated monopolist.
Which of the following statement is normative?
A. A large budget surplus is likely to lower interest rates. B. Higher taxes are needed to support education. C. The interest rate increases are the result of Federal Reserve actions to decrease the money supply. D. Trade deficits frequently occur in conjunction with budget deficits.