In which of the following ways is monopolistic competition similar to the monopoly market?
a. Both have a vertical demand curve.
b. Both have a horizontal demand curve.
c. Both have an upward-sloping demand curve.
d. Both have a downward-sloping demand curve.
d. Both have a downward-sloping demand curve.
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The short run Phillips Curve shows there is ________ relationship between the unemployment rate and the rate of inflation.
A. a positive B. a constant C. a negative D. no
In Great Britain, raising taxes on gasoline has increased the costs of supplying gasoline. As a result, the equilibrium quantity of gasoline ________ and the equilibrium price of gasoline ________
A) increases; falls B) decreases; falls C) does not change; rises D) decreases; rises E) increases; rises
The situation in which short-term interest rates are pushed to zero, leaving the central bank unable to lower them further is known as
A) an interest rate panic. B) the Taylor rule. C) a zero-sum game. D) a liquidity trap.
Monetary policy primarily influences the economy through changes in:
A. the interest rate. B. spending by government. C. spending by the Fed. D. the discount rate.