Suppose you are a policy maker who feels it is important to improve the short-run output of your nation. According to rational expectations theory, which of the following policies would be most likely to achieve your aim?
a. Make an unexpected cut in the federal funds rate.
b. Announce an ambitious plan for monetary expansion.
c. Make an unexpected increase in the federal funds rate.
d. Announce a series of planned increases in the inflation rate.
a. Make an unexpected cut in the federal funds rate.
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If it does not shut down, a perfectly competitive firm produces where marginal cost is equal to the marginal revenue
A) only in the short run. B) only in the long run. C) always to maximize its profit. D) only if it is not possible to produce where price equals average variable cost. E) only if it is not possible to produce where price is greater than average total cost.
A private cost is a cost of production that is
A) borne by the producer of a good. B) measured in marginal terms. C) borne by someone other than the producer of a good. D) measured in total terms.
When Fed policy is being used to offset an inflationary gap, which of interest rates, investment, net exports and aggregate demand moves in the opposite direction from the others? a. Aggregate demand. b. Investment
c. Net Exports. d. Interest rates.
When high-school and college graduates apply for jobs in the labor markets,
A. Job applicants are the "buyers" while employers are the "sellers". B. Job applicants are the "sellers" while employers are the "buyers". C. Job applicants and employers are both "sellers". D. Job applicants and employers are both "buyers".