The Federal Open Market Committee's "balance of risks" is an assessment of whether, in the future, its primary concern will be
A) higher exchange rates or higher unemployment.
B) higher inflation or a stronger economy.
C) higher inflation or a weaker economy.
D) lower inflation or a stronger economy.
C
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Suppose Congress increased spending by $100 billion and raised taxes by $100 billion to keep the budget balanced. What will happen to real equilibrium GDP?
A) Real equilibrium GDP will fall. B) Real equilibrium GDP will rise. C) Real equilibrium GDP will initially rise, but then fall below its previous equilibrium value. D) There will be no change in real equilibrium GDP.
If all firms in a monopolistically competitive market are incurring losses, then eventually:
a. the demand for the products in the market will increase. b. the supply of the products in the market will increase. c. the price of the products in general will decline. d. the cost of production will increase. e. the firms will exit until the existing ones just break even.
A monopolistically competitive firm faces a relatively steeper demand curve than that of a perfectly competitive firm
a. True b. False Indicate whether the statement is true or false
John Maynard Keynes wrote The General Theory of Employment, Interest, and Money (1936) to
a. improve the gold supply balances of the British government. b. prove that the punitive nature of the Treaty of Versailles would ultimately lead to recession in Europe. c. prove that active government policy would produce unemployment and high rates of inflation. d. demonstrate that pessimistic consumers and businesspersons could reduce their spending and condemn the economy to long-run stagnation.