If people have rational expectations and correctly estimate the effects of a change in government policy, when the economy is initially at full employment, any anticipated increase in aggregate demand will result in:
a. a decrease in both aggregate demand and short-run aggregate supply
b. an increase in short-run aggregate supply that will maintain full employment.
c. higher prices that will reduce aggregate demand to its original level.
d. a decrease in short-run aggregate supply that will maintain full employment.
d
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Debit entries on the Balance of Payments are the entries that would
A) mean a loss of foreign exchange. B) bring foreign exchange into the country. C) indicate a surplus exists. D) exist at the bottom line after all accounts are totaled.
A sudden rise in input prices which drives up the marginal cost of producing automobiles will shift the supply curve of automobiles upward
Indicate whether the statement is true or false
To reduce politicization of policy making, many countries have given control of ________ to politically independent central banks
A. fiscal policy B. monetary policy C. unfunded liabilities D. budget deficits
If government imposes a price ceiling on a good that is below the market equilibrium price
A) a surplus will develop. B) a shortage will develop. C) producers will reduce their sales price. D) consumers will reduce their demand for the good.