Suppose the actual equilibrium federal funds rate is below the rate implied by a particular inflation goal. In this situation, the Taylor rule implies that
A. fiscal policy is contractionary.
B. monetary policy is contractionary.
C. fiscal policy is expansionary.
D. monetary policy is expansionary.
Answer: D
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As the value of the Gini coefficient approaches one
A) income distribution becomes less unequal. B) the percentage of the population under the poverty line decreases. C) income distribution becomes more unequal. D) the percentage of the population under the poverty line increases.
When there is a kinked demand curve, an oligopolist's competitors will match price increases
Indicate whether the statement is true or false
Critics of stabilization policy argue that
a. policy affects aggregate demand quickly, but the effects on aggregate demand are long-lived. b. policy affects aggregate demand with a lag, and the effects on aggregate demand are long-lived. c. policy affects aggregate demand with a lag, but the effects are short-lived. d. policy does not affect aggregate demand.
Which of the following can lead to a reversal of the country's trade pattern(that is a shift in which a previously exported good becomes an imported good or vis versa)?
1. Growth in the country's total supply of the factor that initially is scarce in the country 2. International diffusion of technology 3. Shifting tastes of the country's consumers