According to the Lucas supply function, if the expected price level is smaller than the actual price level
A. real output increases.
B. real output must be at a minimum.
C. real output must be at a maximum.
D. real output decreases.
Answer: A
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According to this Application, lower oil prices may affect
A) aggregate supply. B) aggregate demand. C) both aggregate demand and aggregate supply D) neither aggregate demand and aggregate supply
Which of the following summarizes the feedback loop discussed in the video?
A. As the money supply increased, real GDP decreased, which caused the money supply to increase even faster, and so on. B. As the money supply increased, prices rose, which caused the money supply to increase even faster, and so on. C. As prices rose faster, the government had to print even more money, which caused prices to rise even faster, and so on. D. As prices rose faster, real GDP increased, which caused prices to rise even faster, and so on.
Which of the following is a characteristic of an oligopolistic market structure?
A) There are few dominant sellers. B) Each firm sells a unique product. C) It is easy for new firms to enter the industry. D) Each firm need not react to the actions of rivals.
In the monetarist view
A. inappropriate monetary policy is a major source of macroeconomic instability. B. adverse aggregate supply shocks are a major source of macroeconomic instability. C. changes in investment spending are a major source of macroeconomic instability. D. the fact that prices and wages are flexible is a major source of macroeconomic instability.