Opponents of inflation targets believe that:
a. such targets will encourage workers to shirk work
b. such targets will lead to unsustainable economic growth.
c. such targets will lead the Fed to pay less attention to jobs and economic growth.
d. such targets will cause international competitiveness to be lost and the value of savings to be reduced.
e. such targets would prevent investors from investing in profitable ventures.
c
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In the circular flow model, which of the following flows in the opposite direction from the flow of factors of production?
A) finished goods and services B) wages, rent, interest, and profit C) interests payments of Federal, state, and local governments D) firm's profit incentives E) the goods market
The figure above shows the marginal revenue and costs of a perfectly competitive firm. The firm's profit is maximized when the firm produces
A) 90 units of output. B) 130 units of output. C) 170 units of output. D) 210 units of output.
Which of the following is the most likely cause of a recession according to classical and new classical models?
a. government policy. b. unstable expectations. c. a fall in expected profits. d. an anticipated change in the money supply. e. none of the above.
The 1990 U.S. recession was
a. triggered by a negative supply shock b. characterized by falling wage rates as the economy began to correct itself c. relatively painless d. triggered by a negative demand shock e. characterized by disinflation