Suppose there is a tax increase. To stabilize output, the Federal Reserve will
a. increase government spending.
b. increase the money supply.
c. decrease government spending.
d. decrease the money supply.
b
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In order to change inflationary expectations in 1979, the Fed's monetary policy under Paul Volcker's leadership resulted in ________ and ________
A) steep inflation; low unemployment B) deflation; high unemployment C) disinflation; low unemployment D) disinflation; high unemployment E) steep inflation; high unemployment
To model the input decisions for a production system, we plot labor on the horizontal axis and capital on the vertical axis. In the short run, labor is a variable input and capital is fixed
The short-run expansion path for this production system is: A) a vertical line. B) a horizontal line. C) equal to the 45-degree line from the origin. D) not defined.
________ is the tendency to experience losses as more painful than the pleasures that result from gains of the same magnitude:
A. Loss aversion B. The availability heuristic C. The present-aim standard of rationality D. Fungibility
An upward sloping short-run aggregate supply curve suggests that
A. real GDP is determined by aggregate supply. B. prices and wages are completely inflexible. C. prices and wages adjust in part to short-run demand changes. D. prices and wages are completely flexible.