If policymakers increase aggregate demand, then in the short run the price level
a. falls and unemployment rises.
b. and unemployment fall.
c. and unemployment rise.
d. rises and unemployment falls.
d
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Among the opportunity costs of a firm are all of the following EXCEPT
A) the owner's forgone wage. B) costs of resources bought in markets, such as labor. C) normal profits. D) economic profits.
Holding the expected return on bonds constant, an increase in the expected return on common stocks would ________ the demand for bonds, shifting the demand curve to the ________
A) decrease; left B) decrease; right C) increase; left D) increase; right
Why might two presidential candidates appear to have very similar opinions during an election year even if they come from different parties?
a. They aim to please special-interest groups. b. They are logrolling. c. They try to appeal to the median voter. d. Republicans and Democrats usually agree on most issues. e. They don't wish to appear rationally ignorant.
Under the adaptive expectations hypothesis, which of the following is the effect of a shift to a more expansionary monetary policy?
a. In the short run, the real rate of output will be unaffected, but in the long run, it will increase. b. In the short run, the unemployment rate will decrease, but in the long run, it will self correct to the natural rate of unemployment. c. There will be a permanent increase in the real rate of output, but the inflation rate will also be a little higher. d. In the short run, the impact on the real rate of output is uncertain, but in the long run, output will increase.