Refer to Figure 26-12. In the dynamic AD-AS model, if the economy is at point A in year 1 and is expected to go to point B in year 2, and the Federal Reserve pursues no policy, then at point B
A) the unemployment rate is greater than the natural rate of unemployment.
B) incomes and profits are falling.
C) there is pressure on wages and prices to fall.
D) firms are producing above capacity.
D
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When we hear on the news, "The Fed has lowered interest rates today," the Fed has most likely
A) raised the discount rate. B) lowered the required reserve ratio. C) raised the federal funds rate. D) purchased government bonds.
How consistent is the Keynesian consumption function with the random walk hypothesis?
What will be an ideal response?
Tying is always profitable for a monopoly
a. True b. False Indicate whether the statement is true or false
If at the prevailing interest rate the demand for money is $3 trillion, and the supply of money is $2.5 trillion, then which of the following is true?
a. There is excess money supply, interest rates must fall in order to achieve an equilibrium in the money market. b. There is a shortage of money, interest rates must fall in order to achieve an equilibrium in the money market. c. There is a shortage of money, interest rates must rise in order to achieve an equilibrium in the money market. d. There is excess money supply, interest rates must rise in order to achieve an equilibrium in the money market.