The menu cost theory states that
A) wages depend on the productivity of workers.
B) economic agents quickly learn the likely responses of the Fed to changes in unemployment.
C) the economy is characterized by perfect competition.
D) prices are not fully flexible because it is costly for firms to change prices every time there is a demand change.
D
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Which of the following firms is most likely to spend on innovation?
A) A perfectly competitive firm B) A monopoly with absolutely no competition C) A firm that is the only controller of a key resource necessary for production D) A firm that enjoys some monopolistic power, but faces strong competition from its rivals
Explain how a country whose currency is the reserve currency can use monetary policy for macroeconomic stabilization. In particular, explain the result if that country doubled its domestic money supply
What will be an ideal response?
A market in which national currencies are traded by households, firms and governments, is referred to as a(n)
A) foreign exchange market. B) fed funds market. C) international reserves market. D) gold certificate market.
What does the government have to do when there is a budget deficit?
What will be an ideal response?