An expansionary monetary policy is one that
A. reduces aggregate supply and aggregate demand.
B. stimulates aggregate supply.
C. stimulates aggregate demand.
D. reduces aggregate demand while stimulating aggregate supply.
Answer: C
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If an industry is imperfectly competitive, and markets are segmented then
A) a firm may find that it is profitable to engage in dumping. B) a firm may find that international trade is unprofitable. C) a firm may find that it should promote scale economies. D) a firm may find that it has lost its comparative advantage. E) a firm may find that it should become more specialized.
The standard definition of "recession" is
A) a period of a positive frictional unemployment rate. B) two consecutive quarters of falling Real GDP. C) the lowest point in a business cycle. D) a period of negative inflation.
It is assumed that the marginal benefit of air cleanliness falls with the degree of cleanliness since
A) the marginal cost of air cleanliness increases. B) air cleanliness is a public good and not a private good. C) the marginal utility of air cleanliness falls with the degree of cleanliness. D) the generation of pollution should be considered an externality.
If the cross-price elasticity of demand is -3, then the goods are __________ and the consumers' responsiveness would be characterized as __________
a. substitutes; inelastic b. substitutes; elastic c. substitutes; unit elastic d. complements; inelastic e. complements; elastic