Starting from long-run equilibrium, a war that raises government purchases results in ________ output in the short run and ________ output in the long run.
A. lower; potential
B. higher; potential
C. higher; higher
D. lower; higher
Answer: B
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Which of the following is NOT an alternative rule for monetary policy?
A) an inflation rate targeting rule B) a natural unemployment rate targeting rule C) a monetary base instrument rule D) a nominal GDP targeting rule E) a money targeting rule
The attempt to force employers to use more labor than they otherwise would, or to force employers to use labor inefficiently, is known as
A) a secondary boycott. B) a sympathy strike. C) a monopsony. D) featherbedding.
Expansionary fiscal policy can cause a rise in real GDP in combination with
A. an increase in the price level. B. a decrease in the price level. C. no change in the price level. D. a decrease in the price level if the aggregate supply curve is upward sloping.
What are some extensions to the simplified model of the loan able funds market?
What will be an ideal response?