Using Figure 3 above, suppose that the economy was at Y3. This level of GDP would be considered:
A. recessionary.
B. a long run level of output.
C. a natural rate of output.
D. inflationary.
Answer: D
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Which of these financial intermediaries is most likely to invest in new companies that are just starting up and have no track record?
A) Asset management companies B) Hedge funds C) Private equity funds D) Venture capital funds
A decrease in cyclical unemployment will
A) shift the short-run Phillips curve to the left. B) shift the long-run Phillips curve to the left. C) decrease the natural rate of unemployment. D) All of the above are correct. E) None of the above is correct.
An increase in the nominal interest rate would
a. encourage people to hold smaller money balances. b. encourage people to hold larger money balances. c. force the Fed to reduce the money supply. d. cause the real interest rate to decline.
If a college student's demand for newspaper subscriptions is more price-elastic than a business executive's demand for newspaper subscriptions, which of the following pricing strategies would a price-discriminating newspaper publisher follow?
A. Set price according to the marginal cost of printing the newspaper B. Charge a higher price to college students C. Charge a higher price to business executives D. Charge the same rate to college students and business executives