In real business cycle models, business cycles are caused by ______, while in new Keynesian model, business cycles are caused by ________
a. aggregate demand; aggregate demand
b. aggregate demand; aggregate supply.
c. aggregate supply; aggregate demand.
d. fiscal policy; monetary policy
C
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For firms that sell one product in a perfectly competitive market, marginal revenue is:
A. the additional revenue gained from selling one more unit. B. equal to average revenue. C. equal to market price. D. All of these are true.
The risk of a borrower defaulting on a loan is known as:
A. default risk. B. credit risk. C. loan risk. D. asset risk.
For a good that is taxed, the area on the relevant supply-and-demand graph that represents government's tax revenue is a
a. triangle. b. rectangle. c. trapezoid. d. None of the above is correct; government's tax revenue is the area between the supply and demand curves, above the horizontal axis, and below the effective price to buyers.
Based on the graph above, if the economy is at point 2, then (assuming no price shocks and no changes in actual and potential output) the inflation rate next period will be ________ percent
A) 5 B) 3.5 C) 4.5 D) 4 E) none of the above