In which of the following situations would the Fed conduct contractionary monetary policy?
A) The Fed believes that aggregate demand was growing too slowly to keep up with potential GDP.
B) The Fed fears that unemployment is climbing above the natural rate.
C) The Fed is concerned that aggregate demand would continue to exceed the growth in potential GDP.
D) The Fed is worried that deflation will become a problem.
Answer: C
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A. reduces; increases; decreases B. raises; decreases; increases C. raises; decreases; decreases D. reduces; increases; increases
Most government purchases are made at the federal level and not at the state level
a. True b. False Indicate whether the statement is true or false
A country currently is using all its land to produce wheat and grapes. However, the land most suited to growing grapes is being used to produce wheat, and the land most suited to growing wheat is being used to produce grapes. Which of the following statements is true?
a. Production of both wheat and grapes can be increased by shifting tracts of land to their best uses. b. Production of both wheat and grapes can be increased only if more land becomes available. c. production of wheat can increase only if production of grapes decreases. d. Production of grapes can increase only if more labor and machinery become available. e. Production of neither wheat nor grapes is possible without more land becoming available.
In the long-run equilibrium of a competitive market with free entry and exit, firms operate at their __________ scale
Fill in the blank(s) with correct word