The aggregate demand curve is
A. vertical if full employment exists in the economy.
B. horizontal if full employment exists in the economy.
C. downward sloping because of the real-balance, interest rate, and open economy effects.
D. downward sloping because more goods are produced as per unit cost of producing each item falls.
Answer: C
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The unemployment rate at full employment is
A) the natural unemployment rate. B) equal the amount of unemployment caused by job search. C) zero. D) equal to the rationed rate of unemployment. E) undefined because the economy is never at full employment.
Regarding central bank independence
A) the Fed is more independent than the European Central Bank. B) the European Central Bank is more independent than the Fed. C) the trend in industrialized nations has been to reduce central bank independence. D) the Bank of England has the longest tradition of independence of any central bank in the world.
A reduction in the required reserve ratio has the instant effect of:
a. Increasing excess reserves. b. Increasing bank shareholders' equity. c. Increasing bank reserves. d. All of the above are correct. e. None of the above is correct.
Boundary setting refers to
A. managers requesting permission to ratify every decision made by an empowered worker. B. employees seeking approval for every decision from managers. C. workers setting up rules of empowerment that might influence their decision-making authority. D. managers preratifying certain decisions made by empowered workers within a certain range, while still maintaining supervisory control.