Refer to Table 26-3. Consider the hypothetical information in the table above for potential real GDP, real GDP, and the price level in 2016 and in 2017 if the Federal Reserve does not use monetary policy
If the Fed uses monetary policy successfully to keep real GDP at its potential level in 2017, which of the following will be lower than if the Fed had taken no action?
A) real GDP and the inflation rate B) real GDP and potential GDP
C) potential GDP and the inflation rate D) real GDP and the unemployment rate
A
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Use the following production possibilities frontiers to answer the next question.
Curve (a) is the current frontier for the economy. Focusing on curve (a), point N suggests that the economy currently produces
A. less goods for the future than at point P. B. more goods for the future than at point P. C. less goods for the present than at point P. D. a combination of output that is less than its potential.
Which of the following is not cited as a reason for a firm to pursue a group pricing strategy?
A) To minimize its total costs of production. B) To increase its total profit. C) To attract and lock in additional customers. D) To create network externalities.
Output (Total Product) is maximized when
A) average productivity is at its maximum. B) the "law of diminishing returns" sets in. C) marginal productivity is zero. D) marginal productivity is at its maximum.
Why are most contracts incomplete?