To eliminate a recessionary gap, the Fed can _____
Fill in the blank(s) with the appropriate word(s).
increase the money supply, as it will decrease the interest rate and increase investment.
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A.W. Phillips' study of unemployment and inflation in the United Kingdom specifically looked at the empirical relationship between the unemployment rate and the
A) rate of change in prices. B) rate of change in nominal wages. C) rate of change in real wages. D) level of nominal wages.
Which of the following is a difference between a monopolist and a firm in perfect competition?
a. The marginal revenue curve is downward-sloping. b. Marginal revenue equals price. c. Economic profits are zero in the long-run. d. The marginal revenue curve lies above the demand curve.
Suppose that the City of Arcata, California, imposes rent control so that rents cannot exceed $500 per month on one bedroom rental units. Suppose that $500 had also been the equilibrium rental price in Arcata before a huge new apartment complex was built in the nearby town of McKinleyville, where rents are $400 per month. Which of the following is most likely to be true?
a. There will be a lasting surplus of rental housing in Arcata after the new apartment complex is built in McKinleyville. b. There will be a shortage of rental housing in Arcata at the rent-control price of $500. c. The equilibrium rental price in Arcata will fall below $500, and thus rent control will not affect the rental market in Arcata. d. The equilibrium price of $500 per month in Arcata will not change.
One reason why nations trade is because
A. trading provides opportunities to earn profits. B. the rate of interest is not the same in all countries. C. resources are not equally distributed to all nations. D. some nations like to build one thing while others like to build another.