If prices are inflexible, monetary policy:
A. doesn't affect real output or inflation.
B. affects real output but not inflation.
C. affects inflation but not real output.
D. affects both inflation and real output.
Answer: B
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Which of the following would shift the supply curve for CDs to the right?
a. a decrease in the price of materials used to make CDs b. a rise in the cost of labor used to make CDs c. an increase in the price of audio cassettes d. a decrease in the number of suppliers e. an increase in the price of CDs
A street vendor sells a replica of a pair of designer shoes to a young woman who believes the shoes are authentic. The street vendor is engaging in
a. both moral hazard and adverse selection. b. neither moral hazard nor adverse selection. c. moral hazard, but not adverse selection. d. adverse selection, but not moral hazard.
When the government runs a budget surplus, it uses the funds to:
A. decrease public saving. B. decrease transfer payments. C. issue bonds. D. pay down outstanding debt.
All of the following are cited as factors in explaining U.S. competitiveness EXCEPT
A) large investments in scientific research. B) economic restructuring. C) widespread entrepreneurship. D) reducing the federal deficit.