Financial markets pay close attention to changes in the federal funds rate because these changes ________.
A. directly affect the interest payments on the national debt
B. affect other interest rates in the economy
C. directly affect a large volume of loans
D. indicate commercial bank lending policies
Answer: B
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Starting from long-run equilibrium, a large tax increase will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. recessionary; lower; potential B. expansionary; lower; potential C. expansionary; higher; potential D. recessionary; lower; lower
To compensate for the possibility of indirect crowding out, a government engaging in expansionary policy aimed at eliminating a recessionary gap could
A) reduce taxes rather than increase government spending. B) increase spending less than the simplest Keynesian model would predict. C) both reduce taxes and reduce spending to be able to achieve full employment. D) increase spending more than the simplest Keynesian model would predict.
Elena works as a housekeeping staff member in a hotel. Her task is to clean the rooms that are unoccupied by guests. Because it is not possible for her boss to monitor her work regularly, she often skips cleaning some of the rooms
a) What is the term used to refer to such behavior? b) How can the management motivate workers like Elena to work harder?
If the perfect competitor is taking a loss, its output will be _______ it's most efficient output.
A. greater than B. equal to C. less than