If the Fed announces a new policy of slower monetary growth it will result in lower inflation and no change in output only if
A) the policy is credible and price expectations are reduced.
B) the policy is time consistent and expectations remain constant.
C) the policy is time inconsistent and expectations increase.
D) Both A and B are correct.
B
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An increase in government expenditure on goods and services
A) increases aggregate demand. B) increases the aggregate quantity demanded. C) decreases the aggregate quantity demanded. D) decreases aggregate demand.
Compared to their percentage shares in 1968, over the next 40 years, the percentage shares of each of the lowest four quintiles
A. rose substantially. B. rose somewhat. C. stayed about the same. D. declined.
Explain why perfectly competitive markets achieve allocative efficiency.
What will be an ideal response?
In a capitalist system, the decisions and actions of millions of consumers and firms are highly coordinated by:
A. The state and government B. Markets and prices C. A central planning agency D. An international organization