The short-run aggregate supply curve shows ________ while the long-run aggregate supply curve shows ________.
A. potential output; the current inflation rate
B. the current inflation rate; potential output
C. potential output; aggregate spending
D. output; aggregate spending
Answer: B
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A firm using a two-part tariff faces a tradeoff because
A) any increase in consumer surplus must be offset by a decrease in producer surplus. B) the only way to increase the fixed-fee portion of the price is to lower the per-unit portion of the price. C) the only way to increase total revenue is to lower per-unit profit. D) the smaller the variation between the parts of the price, the greater the deadweight loss generated by the pricing scheme.
If society produces at a point inside the production possibilities frontier, it is characterized by full employment of resources
a. True b. False Indicate whether the statement is true or false
According to the theory of _____, people look at past experiences and gradually adapt their beliefs and behavior as circumstances change
a. adaptive expectations b. rational expectations c. sticky wages d. absolute advantage
The conventional policy tools available to the Fed include each of the following, except the:
A. currency-to-deposit ratio. B. reserve requirement. C. target federal funds rate range. D. discount rate.