In the new classical model, the aggregate supply schedule depends on
a. the expected level of the money stock.
b. the expected price level.
c. the expected values of fiscal policy variables and other possible determinants of aggregate demand.
d. Both a and c
e. All of the above
B
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Which of the following is a possible solution when a scarce resource is subject to the tragedy of the commons?
A) force people to move away from the commons B) offer subsidies to consumers C) persuade people to use less of the scarce resource through an advertising campaign D) access to the commons can be restricted through community norms and laws
Expansionary monetary policy is achieved by:
A) decreasing the amount of bank reserves and lowering the federal funds rate. B) decreasing the amount of bank reserves and raising the federal funds rate. C) increasing the amount of bank reserves and lowering the federal funds rate. D) increasing the amount of bank reserves and raising the federal funds rate.
In the long run in monopolistic competition, firms earn zero economic profit
a. True b. False
In the long run, the price level in an economy is determined solely by: a. the long-run aggregate supply curve
b. the aggregate demand curve. c. the amount of cyclical unemployment in the economy. d. the short-run aggregate supply curve. e. the potential output level.