Starting from a position of macroeconomic equilibrium at the full-employment level of real GDP, in the short run, an unanticipated decrease in the money supply will:
a. raise real interest rates, lower the price level, and reduce real GDP
b. raise real interest rates, lower the price level, and leave real GDP unchanged.
c. raise nominal interest rates, lower the price level, and leave real GDP unchanged.
d. lower real interest rates, raise the price level, and increase real GDP.
a
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Suppose that you have returned from your fishing expedition with 20,000 fish. The market price is $3 per fish. Your average fixed cost was $1 and your total variable cost was $5,000 . If the price jumps to $3.50 before you sell your first fish, how much extra profit, if any, do you earn?
a. $10,000 b. $25,000 c. $30,000 d. $45,000 e. $70,000
A profit-maximizing, competitive firm for which the marginal product of labor is diminishing also experiences
a. a perfectly inelastic supply of labor. b. a perfectly elastic supply of labor. c. a downward-sloping demand for labor. d. an upward-sloping demand for labor.
Suppose you withdraw $1,000 from your savings account and put it under your mattress. Briefly explain how this will affect M1 and M2
What will be an ideal response?
Suppose that a monopolist calculates that at its present output level, marginal cost is $4.00 and marginal revenue is $5.00. The firm could increase profits by:
A. Decreasing price and increasing output B. Increasing price and decreasing output C. Decreasing price and leaving output unchanged D. Decreasing output and leaving prices unchanged