"With autonomous changes in the policy interest rate, the Federal Reserve cannot determine the long run equilibrium level of the real interest rate or potential output and will only be able to determine inflation"
This statement is consistent with ________. A) the notion that shifts in the MP curve may lead to shifts in the AD and AS curves but the LRAS remains unchanged
B) the notion of long-run independence between nominal and real variables
C) the notion of monetary neutrality
D) all of the above
E) none of the above
D
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A tax is progressive if it raises a greater fraction of total tax revenue every year
a. True b. False Indicate whether the statement is true or false
Which of the following is an example of a productivity shock?
A. The introduction of new management techniques B. A change in taxes on corporate profits C. An increase in the money supply D. A change in the level of government transfer programs
When a consumer spends all of his or her income and consumes a bundle of goods such that the marginal utility per dollar from all goods is equal, then the
A) consumer's total utility is maximized. B) consumer is in his or her consumption equilibrium. C) marginal utilities for each good are maximized. D) Both answers A and B are correct.
A consumer's utility-maximizing combination of goods is given by the bundle that corresponds to the highest point on his indifference curve
Indicate whether the statement is true or false