Economic analysis requires us to combine:
A. unlimited resources with limited wants.
B. theory with observations.
C. developed and developing nations.
D. republicans and democrats.
B. theory with observations.
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If the Fed promises to conduct a(n) ________ for several years, inflation expectation will be ________
A) contractionary fiscal policy; high B) expansionary monetary policy; high C) contractionary monetary policy; high D) expansionary fiscal policy; low
Consider an adverse supply shock in the RBC model. The central bank knows that the pre-shock level of output
A) can be maintained only by reducing the money supply. B) can be maintained only by holding constant the money supply, C) can be maintained only by increasing the money supply. D) cannot be maintained by any monetary policy.
Policies to encourage higher personal saving rates include ________
A) lowering income taxes B) lowering sales taxes C) increasing the quantity of money D) raising asset prices E) reducing interest rates
When the marginal utility derived from a good is negative, total utility is _____
a. increasing b. at a minimum c. equal to zero d. decreasing e. at a maximum