Expansionary fiscal policy to prevent real GDP from falling below potential real GDP would cause the inflation rate to be ________ and real GDP to be ________
A) higher; lower B) higher; higher C) lower; lower D) lower; higher
B
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In a perfectly competitive market, if market price is higher than the average total cost of production, ________
A) firms will incur losses in the long run B) firms will make profits in the long run C) new firms will enter the industry D) firms will exit the industry
Lily is a college student who likes to buy only two goods: Cheetos and Pepsi. To determine Lily's budget line, you need to know I. Lily's preferences for Cheetos and Pepsi. II. The prices of Cheetos and Pepsi. III. Lily's income
A) II only B) I and II C) II and III D) I, II and III
Economic rents can lead to large wage differentials.
Answer the following statement true (T) or false (F)
Suppose a country with a fixed exchange rate decides to reduce the price of its currency. This change in policy is called
A) an appreciation. B) a depreciation. C) a peg. D) a devaluation. E) a revaluation.