When he was chairman of the Fed, Paul Volcker faced an economy with significant stagflation which was a result of oil shocks. Volcker was determined to bring the inflation rate down, which essentially acted like a decrease in the inflation target
In this sense, Volcker's action caused ________ and caused inflation to decrease and ________. A) the AD curve to shift to the left; real GDP to increase.
B) the AD curve to shift to the left; real GDP to decrease.
C) the AS curve to shift to the right; real GDP to increase.
D) the AS curve to shift to the right; real GDP to decrease.
B
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Why was so much of the "boom" of the 2000s concentrated in the housing and real estate sectors?
A) The Fed attempted to engineer an increase not only in real GDP, but in particular further the expansion of those sectors. B) The Community Reinvestment Act (CRA) called for banks to offer subprime loans to at-risk customers. C) People were encouraged to "flip" houses because the low interest and rate and easy lending practices made it appear profitable to do so. D) For all of the above reasons.
The above figure shows the marginal social benefit, marginal private cost and marginal social cost of producing steel. If the market is competitive and unregulated, how much steel will be produced?
A) 0 tons B) 2 tons C) 4 tons D) 8 tons
Refer to the above table. The marginal factor cost of labor is $200. To get the firm to hire 8 workers, the
A) firm must be able to reduce wages below the marginal factor cost. B) price of the good must be $8. C) eighth worker must be at least as productive as the seventh worker was. D) wage rate must be a fraction of the marginal factor cost of labor.
The size of a country's "economic pie" is thought of as the total dollar value of all goods and services produced during some period of time. The economic pie
a. is a fixed total waiting to be divided up among people. b. determines how much wealth an individual can obtain. c. is variable, not fixed, across time periods. d. depends solely upon the natural resources of a country.