The money market is in equilibrium when there is no excess supply of or excess demand for bonds
a. True
b. False
A
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A lumberjack loses his job because timber cutting restrictions were imposed by the EPA to protect the spotted owl habitat. This lumberjack would be
A) structurally unemployed. B) cyclically unemployed. C) frictionally unemployed. D) seasonally unemployed.
In the simple deposit expansion model, an expansion in checkable deposits of $1,000 when the required reserve ratio is equal to 20 percent implies that the Fed
A) sold $200 in government bonds. B) sold $500 in government bonds. C) purchased $200 in government bonds. D) purchased $500 in government bonds.
Governments often choose to regulate monopolies, rather than break them up into smaller firms, because monopolies often are
a. entitled to economic profits b. very big and politically powerful c. more efficient producers d. providing useful goods and services that would not otherwise be provided e. heavily subsidized
Explain how the static aggregate demand and aggregate supply model gives us misleading results about the price level, particularly with respect to decreases in aggregate demand. Describe how the aggregate demand curve is different in the dynamic model as
compared to the static model. Describe how potential GDP is different in the dynamic model as compared to the static model. What will be an ideal response?