If expectations are “rational,” can the Fed control unemployment?
A. Yes, provided it announces policy in advance.
B. Yes, if it affects the aggregate demand curve.
C. No, because aggregate supply is vertical even in the short run.
D. No, because only fiscal policy can affect unemployment.
Answer: C
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People who are working up to 34 hours per week but would like to work more are considered
A) involuntary part-time workers. B) discouraged workers. C) job leavers. D) job seekers. E) unemployed.
Suppose the total benefit of watching 1 baseball game is 100, the total benefit of watching 2 games is 120, and the total benefit of watching 3 games is 125. In this case, the marginal benefit of watching the 3rd game is:
A. 125 B. 375 C. 5 D. 41.67
In the intermediate range of the aggregate supply curve, higher aggregate demand will increase:
A. both the price level and real GDP. B. real GDP without raising the price level. C. the price level without affecting real GDP. D. the price level but reduce real GDP.
Suppose the Fed raises the federal funds rate. Describe the ripple effects of this monetary policy. Other short-term interest rates and the exchange rate ________. The quantity of money and supply of loanable funds ________.
Fill in the blank(s) with the appropriate word(s).