The change in producer surplus from free trade is equal to area:

Monetary policy is controlled by the U.S. Congress

Indicate whether the statement is true or false

Measures of the Solow residual show it to be

A) strongly procyclical. B) mildly procyclical. C) mildly countercyclical. D) strongly countercyclical.

Suppose the economy is initially in long-run equilibrium. For each of the shocks listed below, explain the long-run effects on output and the price level

(a) Labor supply decreases. (b) The government shuts down the Bureau of Economic Analysis. (c) Productivity increases.

In late 2007, the Fed began a series of cuts in the federal funds rate. Because the core inflation rate was about two percent, the most likely reason for these interest rate cuts was

A) to increase the real interest rate. B) to avoid a recession. C) to encourage households to save more money. D) to reduce the natural unemployment rate. E) to raise the price of the dollar in the foreign exchange market.