Explain monetary policy goals and discuss any goal conflicts in the long run and the short run
What will be an ideal response?
Monetary policy has three goals: price level stability, maximum employment, and moderate long-term interest rates. In the long run, these goals all coincide and are best met by keeping the inflation rate low. In the short run, however, there is a tradeoff: Higher inflation can lead to lower unemployment and hence higher employment. So in the short run, higher employment can be attained but at the cost of higher inflation.
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One of the reasons we know that international labor mobility has been higher at other times is because
A) the percent of our population that was foreign born was higher. B) the percent of our population that was foreign born was lower. C) wages were lower. D) labor was important in agriculture. E) the population was younger.
Self- reinforcing mechanisms that cause the poor to stay poor are called:
A. social aberrances. B. social networks. C. poverty traps. D. societal traps.
Some reasons that firms may experience diseconomies of scale include
a. the firm is too small to take advantage of specialization b. large management structures may be bureaucratic and inefficient c. if there are too many employees, the work place becomes crowded and people become less productive d. having more employees doesn't mean there will be more raw materials to use in production e. average fixed costs begin to rise again
Assume that a 4 percent increase in income across the economy produces an 8 percent increase in the quantity demanded of good X. The coefficient of income elasticity of demand is:
A. negative and therefore X is an inferior good. B. negative and therefore X is a normal good. C. positive and therefore X is an inferior good. D. positive and therefore X is a normal good.