The tying down of the price level to a nominal variable by the central bank is known as committing to ________
A) a nominal anchor
B) rational expectations
C) a customs union
D) a positive aggregate demand shock
A
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A change in the price level brings a ________ the aggregate supply curve, NOT a ________ the aggregate supply curve
A) vertical displacement of; change in the slope of B) change in the slope of; horizontal displacement of C) shift in; change in the slope of D) movement along; shift in E) shift in; movement along
Average cost
a. is always larger than marginal cost. b. declines for some range of output, hits a minimum, and then increases. c. is always smaller than marginal cost. d. is total cost/price of the product.
Foreign income is defined to be income earned:
A. on investments made abroad. B. by those living outside a country. C. when a domestic citizen works abroad. D. by a nation's firms when they operate abroad.
A reduction in tax rates may result in a short-term reduction in government revenues, but it will also leave people with more disposable income.
a. true b. false