Potential advantages of nominal GDP targeting include
A) it implies that the central bank will respond to slowdowns in the real economy even if inflation is not falling.
B) real GDP growth that is below potential or inflation that is below the inflation objective will encourage more expansionary monetary policy.
C) it focuses not only on controlling inflation but also explicitly on stabilizing real GDP.
D) all of the above.
D
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The candy store represented in the figure to the right is currently selling Qa units of candy at a price of Pa. Is this candy store maximizing its profit and if it is? not, what would you recommend to the? firm?
A) Yes, it is maximizing its profit by charging the highest price possible.
B) No, it is not; since its marginal cost is constant, it should produce and sell as much candy as it can. It should sell Qd units at a price of Pd.
C) No, it is not; it should lower its price to Pc and sell Qc units.
D) No, it is not; it should lower its price to Pb and sell Qb units.
When a transfer price increases
a. the profits of the division using the intermediate product will rise b. the profits of the division using the intermediate product will be unaffected c. the profits of the division using the intermediate product will fall d. the costs of the division using the intermediate product will fall
In the graph, when disposable income is _______, saving is zero.
A. 0
B. 1000
C. 2000
D. 3000
Refer to Figure 3-6. The figure above represents the market for coffee grinders. Assume that the market price is $21. Which of the following statement is true?
A) There is a shortage that will cause the price to increase; quantity demanded will then decrease and quantity supplied will increase until the price equals $25. B) There is a shortage that will cause the price to increase; quantity supplied will then decrease and quantity demanded will increase until the price equals $25. C) There is a shortage that will cause the price to decrease; quantity demanded will then increase and quantity supplied will decrease until the price equals $25. D) There will be a shortage that will cause the price to increase; demand will then decrease and supply will increase until the price equals $25.