The supporters of a monetary growth rule believe that active monetary policy
A) stabilizes the economy, decreasing the number of recessions and their severity.
B) destabilizes the economy, increasing the number of recessions and their severity.
C) cannot change the inflation rate.
D) cannot change real GDP.
Answer: B
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Essential goods give rise to corner solutions.
Answer the following statement true (T) or false (F)
Refer to the figure above. If the average cost faced by the monopolist when it produces and sells the optimal output is $4, ________
A) it makes a loss of $60 B) it makes a loss of $120 C) it makes a profit of $60 D) it makes a profit of $90
Suppose one group of people is asked to imagine that, having previously purchased a ticket for $10, they arrive at the theater to discover they have lost their ticket, and a second group of people is asked to imagine that they arrive just before the performance to buy a ticket and find they have lost $10 from their wallets. According to the rational choice model, which group should be more likely to say they would still attend the performance?
A. Neither group should be interested in attending the performance. B. Both groups should be equally likely to say they would attend. C. The lost $10 group D. The lost ticket group
If Eastland's consumer confidence rises, what would happen to macroeconomic equilibrium in the short-run if the short-run aggregate supply curve is upward sloping?
A) AD shifts right, aggregate output increases, and prices fall. B) AD shifts right, aggregate output increases, and prices rise. C) AD shifts left, aggregate output decreases, and prices fall. D) AD shifts left, aggregate output decreases, and prices rise.