Refer to Figure 15-12. In the dynamic AD-AS model, the economy is at point A in year 1 and is expected to go to point B in year 2, and the Federal Reserve pursues policy. This will result in
A) potential real GDP levels lower than what would occur if no policy had been pursued.
B) inflation rates higher than what would occur if no policy had been pursued.
C) real GDP levels higher than what would occur if no policy had been pursued.
D) unemployment rates higher than what would occur if no policy had been pursued.
D
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You are the sales manager for a software company and have been informed that the absolute value of the price elasticity of demand for your most popular software is less than 1. To increase total revenues from that product, you should
A. hold the price of the software constant. B. increase the supply of the software. C. increase the price of the software. D. decrease the price of the software.
A Federal Reserve repurchase agreement involves
A) an agreement by a bank to repay a discount loan on a specific day. B) an agreement by a dealer to buy back securities she has sold to the Fed. C) an agreement between the Fed and the Treasury for the Fed to purchase a specified amount of Treasury securities. D) an agreement by a commercial bank to make a loan to another bank in the federal funds market.
A tax on buyers shifts the demand curve and the supply curve
a. True b. False Indicate whether the statement is true or false
Why doesn't the electric company ever offer sale prices?
a. The government regulates electricity prices. b. A sale would encourage high usage and cause blackouts. c. Electricity is a necessity, so demand is inelastic. d. The electric company is greedy and does not care