The Fed will raise the interest rate by the greatest amount when the economy is on the ________ part of the AS curve and there is ________.
A. flat; an increase in taxes
B. steep; a decrease in taxes
C. flat; a decrease in taxes
D. steep; an increase in taxes
Answer: B
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Suppose a monopolistic competitor produces 1,250 units of a good in equilibrium and charges a price of $7.50 for each unit. If the average total cost of producing 1,250 units of the good is $8, what is the total loss incurred by the producer?
A) $0.50 B) $500 C) $625 D) $1.50
In the Gordon Growth Model, the growth rate is assumed to be ________ the required return on equity
A) greater than B) equal to C) less than D) proportional to
Use the following information on a hypothetical short-run production function to answer questions a-c
Units of Labor/Day 5 6 7 8 9 Units of Output/Day 120 140 155 165 168 The price of labor is $20 per day. Ten units of capital are used each day, regardless of output level. The price of capital is $50 per unit. a. Calculate the marginal and average variable product of each unit of labor input. b. Calculate total, average total, average variable, and marginal costs. c. Can you tell where diminishing marginal returns sets in?
In the determination of disposable income, transfer payments are treated as if they
A. are the same as taxes. B. did not exist. C. are the opposite of taxes. D. were a constant amount.