Policymakers can neutralize:
A. only demand shocks.
B. supply shocks in both the short run and the long run.
C. supply shocks, but only in the long run.
D. supply shocks, but only in the short run.
Answer: A
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An economic ________ refers to either an upturn or a downturn in the economy
A) fluctuation B) stagnation C) model D) chain index
Under a laissez-faire system,
a. government organizes production and distribution of goods. b. a small bureaucracy of central planners tells firms what to produce and how to produce it. c. costs of production and consumers' demands determine the output mix. d. firms try to produce the goods that they think are good for consumers.
Which of the following policy actions by the Fed would cause the money supply to decrease?
A. an open market purchase of government securities B. a decrease in required reserve ratios C. a decrease in the discount rate D. an open-market sale of government securities
Can a monopolist that can charge only one price maximize its profit at a quantity that is equal to the quantity produced if the industry were perfectly competitive?
A. No. Never. B. Yes, if the fixed costs are zero. C. Yes, if the marginal costs are zero. D. Yes, if the total costs are zero.