Federal Reserve Chairman Volcker's policy to fight inflation
A) led to the 1981-1983 recession, but was ultimately successful.
B) led to the 1981-1983 recession, but did not end high inflation due to beggar-thy-neighbor effects.
C) was perfectly complemented by Reagan's decrease in fiscal spending.
D) led to the 1981-1983 recession and foretold the economic downturn in the mid-1990s.
E) led to an immediate depreciation of the dollar.
A
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Refer to Horizontal Merger. After the merger, producer's surplus is equal to
The following questions refer to the accompanying diagram, which shows the effects of a horizontal merger. Before the merger, the firm behaves competitively producing Q0 and charging P0. The merger lowers the firm's marginal cost and gives the firm enough market power to switch to the monopoly equilibrium.
a. area A + C + F.
b. area C + D + F + G.
c. area C + D + E - F - G.
d. area C + D.
Which of the goals pursued by policymakers in an open economy is desirable because it can reduce the severity of business cycles?
A) exchange-rate stability B) monetary policy independence C) free capital flows D) appreciation of the domestic currency
The marginal tax rate and the average tax rate are the same under a
A) progressive income tax system. B) regressive income tax system. C) proportional income tax system. D) none of the above.
Which of the following statements about gold jewelry and round-trip bus tickets to Bismarck, North Dakota, is most likely to be correct?
a. They are both inferior goods. b. Their demand curves probably are quite similar. c. They are complements. d. They are substitutes. e. They are unrelated.