In the dynamic aggregated demand and aggregate supply model, if AD shifts faster than AS,
A) deflation occurs.
B) stagflation occurs.
C) inflation occurs.
D) disinflation occurs.
C
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Discretionary monetary policy is monetary policy that is based on
A) the judgment of Congress about the current needs of the economy. B) the judgment of the monetary policymakers about the current needs of the economy. C) the ups and downs of the stock market. D) a rule that allows no discretion in how policymakers respond to the state of the economy. E) rules that depend upon the state of the economy.
Britain's 1992 recession is probably the result of:
A) the struggle to reconcile monetary and fiscal policy. B) the adherence to the ERM, which required Britain to raise interest rates to maintain exchange parity. C) high unemployment rates, which are a product of the generous welfare system. D) poor planning for the conversion to the euro.
ALC, Inc., has, in recent years, opened large markets of new customers, experienced strong competition from substitutes, and survived a nasty national recession. When the chief economist statistically estimated the company's product demand using data from the past five years, she found a statistically significant positive (direct) relationship between price and quantity. What according to you led to this finding?
What will be an ideal response?
Which of the following is a characteristic of a monopolistically competitive market?I.Firms sell differentiated products.II.Each firm earns a positive economic profit in the long run.III.Firms freely enter and exit the market.
A. II only B. I and II only C. I and III only D. I, II, and III