The AD curve is:
A. the combination of money and velocity growth rates that add up to a constant amount.
B. the combination of inflation rates and real growth rates that add up to a constant amount.
C. vertical at the economy's long-run real GDP growth rate.
D. horizontal at the economy's long-run inflation rate.
Answer: B. the combination of inflation rates and real growth rates that add up to a constant amount.
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For a product with a constant or gently increasing opportunity cost of producing additional units, as more is produced, we expect that
A) demand is price elastic. B) supply is price elastic. C) demand is price inelastic. D) supply is price inelastic. E) demand is unit elastic.
Because each oligopolist cares about its own profit rather than the collective profit of all the oligopolists together,
a. they are unable to maintain the same degree of monopoly power achieved by a monopolist. b. each firm's profit always ends up being zero. c. competitive pressures are absent from the market. d. it will be easier to maintain collusive agreements.
The larger the deadweight loss from taxation, the larger the cost of government programs
a. True b. False Indicate whether the statement is true or false
If the Fed wishes to decrease the money supply it can:
A. Raise the discount rate. B. Buy bonds on the open market. C. Decrease the required reserve ratio. D. Decrease the federal funds rate.