To achieve long-run equilibrium in an economy with a recessionary gap, without the use of stabilization policy, the inflation rate must:
A. not change.
B. increase.
C. decrease.
D. either increase or decrease depending on the relative shifts of AD and AS.
Answer: C
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Which of the following explains why Congress or the president might hesitate to use restrictive fiscal policy in an election year?
A. Monetary policy is always more effective. B. Fiscal year appropriations are not under the authority of Congress. C. Voters might become unemployed. D. Fiscal policy is too complex.
A manager believes there is a 10 percent chance their firm will have to pay $1,000,000 and a 90 percent chance they will be found innocent and pay nothing except the legal fees of $200,000. If the manager chooses to not settle for $300,000 and to enter the litigation instead, which of the following is true?
A) The manager is a risk lover. B) The manager is risk averse. C) The manager is risk neutral. D) The manager is risk intolerant.
The beginning point of a graph (the 0,0 point) is known as
a. ground zero. b. mother lode. c. the origin. d. square one. e. the beginning.
The FOMC no longer sets targets for M1 and M2 to meet its goals of price stability and high employment
Indicate whether the statement is true or false