Suppose that the central bank must follow a rule that requires it to increase the money supply when the price level falls and decrease the money supply when the price level rises. If the economy starts from long-run equilibrium and aggregate demand shifts right, the central bank must
a. decrease the money supply, which will move output back towards its long-run level.
b. decrease the money supply, which will move output farther from its long-run level.
c. increase the money supply, which will move output back towards its long-run level.
d. increase the money supply, which will move output farther from its long-run level.
a
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A monopolistically competitive firm is making a positive economic profit. In the long run, which of the following is most likely?
A) It will produce less output and it will charge a lower price. B) It will produce the same output and charge the same price. C) It will produce less output but keep price the same. D) It will keep output the same but will charge a higher price.
A fair bet is one where
A) the player has a 50/50 chance of winning. B) the player's utility function is convex. C) the expected value is zero. D) the expected value is positive.
Which of the following is related to the concept of trade-off used in economics?
a. Paying tuition to attend college b. Paying a high price for a movie ticket on the first day of screening c. Not having enough information available to make a rational decision d. Giving up one good or activity in order to obtain some other good or activity e. Having your cake and eating it too
A program that is growing across the United States that helps start new entrepreneurial businesses in an area is called _______________.
Fill in the blank(s) with the appropriate word(s)