A resilient market is one in which
A) wide price swings occur when orders decline.
B) volume picks up quickly when prices change.
C) bid-asked spreads are large.
D) volume is large.
B
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In a two-period model, holding everything else constant, an increase in current taxes
A) unambiguously increases the current account surplus. B) unambiguously decreases the current account surplus. C) has an uncertain effect on the current account surplus. D) has no effect on the current account surplus, as long as Ricardian equivalence holds.
Suppose that the market price of good X equals the firm's cost of producing that good, but it does not reflect any costs imposed on society. Which of the following is FALSE?
A) The good is priced too low. B) An external benefit is associated with good X. C) Resources are over-allocated in the production of good X. D) Too much of good X is being produced.
According to the Taylor rule, the Fed should:
a. lower the fed funds rate by 0.5% if RGDP increases 1.0% over potential GDP. b. raise the fed funds rate by 0.5% if RGDP increases 1.0% over potential GDP. c. raise the fed funds rate by 1.0% if RGDP increases 0.5% over potential GDP. d. raise the fed funds rate by 2.0% if RGDP increases 0.5% over potential GDP.
After Hurricane Katrina, the supply curve for oil shifted to the left, and as a result
A. gas prices remained at the equilibrium price. B. there was a corresponding shift of the demand curve. C. a new equilibrium price was reached. D. the equilibrium point moved along the supply curve.