In Figure 4-10 above, preferring the "easy fiscal, tight money" policy mix at a certain income is why we are at
A) point A rather than point C.
B) point C rather than point A.
C) point D rather than point B.
D) point B rather than point D.
D
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The Fed buys $100 million U.S. government securities from Bank of America. Bank of America's balance sheet shows this transaction as ________ in total assets and ________ in reserves
A) no change; a $100 million decrease B) no change; a $100 million increase C) a $100 million increase; no change D) a $100 million increase; a $100 million increase E) a $100 million decrease; a $100 million decrease
Countries that fix the foreign exchange value of their currencies, while following a highly expansionary monetary policy, will
a. be unable to maintain both the fixed-exchange rate and the full convertibility of their currency. b. generally experience rapid rates of economic growth. c. make it easier for their citizens to engage in international trade. d. have relatively low rates of domestic inflation.
In a perfectly competitive industry, economic profit
A. Can persist in the long run because of homogeneous products. B. Will always be negative in the long run because of ease of entry. C. Can persist in the long run because of barriers to entry. D. Will approach zero in the long run as more firms enter the market.
Refer to the diagram. At the profit-maximizing output, the firm will realize:
A. a loss equal to BCFG.
B. a loss equal to ACFH.
C. an economic profit of ACFH.
D. an economic profit of ABGH.