What are the objectives of monetary policy?
What will be an ideal response?
As set out in law, the objectives of monetary policy are to achieve "maximum employment, stable prices, and moderate long-term interest rates."
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Jane's Garage Cleaning is a perfectly competitive firm that currently cleans 40 garages a week. Jane's marginal cost is less than the price she charges. Jane can increase her profit if she
A) charges a higher price. B) charges a lower price. C) cleans fewer than 40 garages a week. D) cleans more than 40 garages a week.
A decrease in disposable income causes a shift in the consumption function
a. True b. False Indicate whether the statement is true or false
According to the more-is-better principle:
A. a consumer will always select the bundle that is ranked highest among all alternative bundles. B. a consumer will prefer a bundle that has the largest amount of the good they prefer most. C. consumers always try to achieve the highest possible level of well-being. D. when comparing consumption bundles, a consumer prefers a bundle that has more of every good.
If fiscal policy authorities believe that the natural rate of unemployment is lower than it actually is, and pursue fiscal policies to move economic output to what they believe full employment to be, then which of the following is most likely to occur?
a. A recession b. Runaway inflation c. Increasing unemployment d. A depression