Assume the economy is in short-run equilibrium at a real GDP above its potential real GDP. According to classical theory, which of the following policies should be followed?
a. The Federal Reserve should use open market operations and buy U.S. government securities.
b. The Federal Reserve should not follow a fixed rule
c. The federal government should cut taxes.
d. Fiscal policy and monetary policy should not be activist.
d
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Suppose that initially there is no public debt. Using the above table, the public debt over this four year period would have
A) increased by $215. B) decreased by $100. C) increased by $1,375. D) decreased by $1,590.
Pharmaceutical companies receive patents as an exclusive right to produce a drug. This results in
a. normal profits on the patented drug. b. monopoly status in the production of the drug. c. lower prices for patients requiring the drug. d. orphan drug status. e. fewer new chemical compounds discovered.
The Herfindahl index would be 5000 if the only two firms in an industry have equal market shares
a. True b. False
If you lost 10 percent on $200 worth of stock in a 3x margin account, then you would lose:
A. $60. B. $20. C. $30. D. $40.