If a recession were the result of monetary policy, we should observe:
A. inflation increasing as output decreases.
B. a high rate of money growth.
C. inflation slowing as output falls.
D. potential output decreasing.
Answer: C
You might also like to view...
Assume that a monopoly is producing at a profit-maximizing output level. If the firm's total fixed costs decrease, the firm
A) should lower its price. B) should increase its price. C) should continue to produce at the same level. D) increase its output level.
Protectionism through anti-dumping laws blocks imports that are sold below the cost of production by imposing ___________ that increase the price of these items to reflect their cost of production.
a. quotas b. tariffs c. standards d. sanctions
Macroeconomic models help clarify important questions such as the following, excep
A. Can governments reduce the severity of their economies' recessions? B. Is a policy of manipulating interest rates more effective at mitigating short-run economic fluctuations than a policy of changing the tax rates? C. How will OPEC manipulate and maintain the price of crude oil in the world markets? D. Is there a trade-off between lower unemployment and lower inflation?
Ed is a freelance writer who could work for a newspaper at $25,000 a year but instead works for himself for $41,000 a year. His only business expenses are $1,000 for writing materials and $12,000 for rent. Ed's normal profit is $1,000
Ed's economic profit from working as a freelance writer is A) $1,000. B) $2,000. C) $15,000. D) $25,000.