Which of the following can make it very difficult for monetary policy to address a recession?
a. velocity
b. inflation
c. deflation
d. aggregate demand
c. deflation
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During a recession when people's incomes drop, grocery chains experience much smaller declines in sales than do upscale department stores. Explain this phenomenon using the concept of elasticity
What will be an ideal response?
What is the aggregate production function?
What will be an ideal response?
In order to determine the average variable cost, the firm's variable costs are divided by _______________________.
a. its fixed costs b. the quantity of output c. its average costs d. diminishing marginal costs
Which of the following statements is FALSE?
A) Other things being equal, society's overall well-being is reduced when a perfectly competitive industry is monopolized. B) When both a perfectly competitive industry and a monopolist face the same production costs and the same market demand curve,the monopolist offers a lower level of output for sale. C) The profit-maximizing monopolist will always produce only along the inelastic portion of the demand curve, whereas equilibrium in a perfectly competitive industry always occurs along the elastic portion of the demand curve. D) When both a perfectly competitive industry and a monopolist face the same production costs and the same market demand curve, the monopolist charges a higher price for its product than what would be charged in a perfectly competitive situation.