Under a liquidity trap in the New Keynesian model,
A) prices cannot be sticky.
B) monetary policy is ineffective.
C) the economy is always efficient.
D) fiscal policy is ineffective.
B
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Assume that, over time, engineers develop new residential furnaces that can run on different types of fuels, e.g., natural gas, electricity, propane, and fuel oil, simply by flipping a switch on the furnace
How would this technological change affect the price elasticity of demand for natural gas? Why?
Answer the following statements true (T) or false (F)
1) In the short run, managers are limited because at least one input is fixed. 2) The long-run marginal cost curve intersects the minimum point on the long-run average cost curve. 3) The long-run profit-maximizing quantity is found by setting the long run marginal cost equal to the long-run average cost. 4) In response to a decrease in the market demand, to maximize short-run profits, managers of perfectly competitive firms will decrease production by employing fewer fixed inputs. 5) At its current production level, a perfectly competitive firm's marginal revenue and long-run marginal cost are equal to $4 and its long-run average cost is $3, it should expect the market price of its product to fall.
Demand for a particular type of apple is always strong in the beginning of fall. As a result, grocery stores typically face a _____ of these apples, causing them to _____ their price for the good
a. shortage; raise b. surplus; raise c. shortage; reduce d. surplus; reduce
Imagine two economies that are identical except that for a long time, economy A has had a money supply of $1,000 billion while economy B has had a money supply of $500 billion. It follows that
a. real GDP and the price level are lower in country B. b. real GDP, but not the price level, is lower in country B. c. the price level, but not real GDP is lower in country B. d. neither the price level or real GDP is lower in country B.