Monetary policy could be procyclical if the Federal Reserve
A) is late recognizing that a recession has begun and does not conduct expansionary monetary policy.
B) is late recognizing that a recession has begun and conducts expansionary monetary policy.
C) is quick to recognize that a recession has begun and conducts expansionary monetary policy.
D) is quick to recognize that a recession has begun and does not conduct expansionary monetary policy.
B
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The "solvency condition" states that the debt-GDP ratio will rise continuously so long as
A) the real GDP growth rate exceeds the real interest rate. B) the real interest rate exceeds the real GDP growth rate. C) the real interest rate exceeds the nominal interest rate. D) the nominal interest rate exceeds the cost of borrowing.
Moving downward along a straight-line demand curve, the absolute value of the price elasticity of demand
a. always rises b. rises until the midpoint of the curve is reached, and then falls c. falls until the midpoint of the curve is reached, and then rises d. always falls e. falls from 1 to 0
Which of the following would be most likely if firms in a competitive price-searcher market were earning economic profit?
a. Production inefficiencies would persist until the profit was eliminated. b. Firms would decrease their rate of output in the short run, causing a decline in profitability in the market. c. New firms would enter the market, resulting in fewer sales by existing firms. d. All firms in the market would continue to produce at their current levels and continue to charge the same price.
Aggregate accounting enables us to measure and analyze how much a nation is producing and consuming.
Answer the following statement true (T) or false (F)