In Figure 17-3 above, suppose we are working under assumptions of the Lucas model. With an expansionary monetary policy, the "policy ineffectiveness proposition" is shown as a movement between points
A) A and C.
B) A and B.
C) D and B.
D) D and A.
E) A and E.
E
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Which of the following statements is true?
A) The total cost of production in a perfectly competitive market can be minimized only when the marginal costs across firms in the market are different. B) When a competitive market is allowed to operate efficiently, firms end up producing goods using the least amount of scarce resources. C) Under a perfectly competitive framework, a ruling authority is essentially required to dictate goals for the betterment of society. D) A firm interested in maximizing profits in a perfectly competitive market will produce output at a level where marginal revenue is equal to the price and greater than the marginal cost.
What is an effluent fee? Graphically, show how an effluent fee can correct an externality
What will be an ideal response?
In order to maximize profit, a firm that produces its output in two plants will allocate total output between the two plants so that
A. marginal revenue for the firm is equal to the sum of the plants' marginal costs. B. marginal cost for the firm is equal to the sum of the plants' marginal costs. C. marginal cost is equal for the two plants. D. all of the above
Expansionary fiscal policy actions
A) Result in an increase in national debt. B) Lead to growth in aggregate demand resulting from lower interest rates. C) Can be inflationary if the economy is in the Keynesian range of aggregate supply curve. D) None of the above.