The firm manager with horizontal indifference curves (output on the horizontal axis, profit on the vertical axis) views:
A. only output to be "goods."
B. only profits to be "goods."
C. both profits and outputs to be "goods."
D. None of the statements is correct.
Answer: B
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Starting from long-run equilibrium, a large tax cut will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; higher B. expansionary; higher; potential C. recessionary; higher; potential D. recessionary; lower; lower
Who determines the size of the money supply in the U.S.?
A. the Federal Reserve B. the Federal Reserve and the banking system together C. the Federal Reserve and the Treasury Department together D. the Treasury Department
The federal funds rate
A) is determined directly by firm demand for funds. B) is determined administratively by the Fed. C) is determined directly by household demand for funds. D) is determined by the supply of and demand for bank reserves.
Ethics play a key role in income redistribution.
A. True B. False C. Uncertain