Monetary policy has medium-run effects on which of the following?
A) the level of output but not its composition
B) both the level and composition of output
C) only the price level
D) the level of output AND the price level
E) none of the above
C
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A currency depreciation
A. reduces aggregate demand and increases aggregate supply. B. reduces aggregate demand and aggregate supply. C. increases aggregate demand and reduces aggregate supply. D. increases aggregate demand and aggregate supply.
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
One way DeBeers managed to maintain control over the diamond industry was to:
A. continue to be the sole diamond producer by buying all existing diamonds. B. create the illusion of no close substitutes through marketing. C. punish consumers who sought to store their wealth in diamonds. D. All of these statements are true.
The Dodd-Frank bill led to the financial meltdown of 2008
Indicate whether the statement is true or false