If the economy grows steadily over several years and at the same time maintains the aggregate demand curve in its present position, then the economy will experience which of the following?
A. a stable price level
B. secular deflation
C. inflation
D. The price level cannot be determined without more information.
Answer: B
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Refer to the above graph. In the short run, this monopolistically competitive firm will set price at:
A. $55 and produce 45 units of output B. $65 and produce 35 units of output C. $50 and produce 35 units of output D. $52 and produce 50 units of output
Assume the Fed initiates an expansionary monetary policy that is correctly anticipated by economic agents in the economy. According to the rational expectation hypothesis, the result is
A. an increased price level, but no change in real Gross Domestic Product (GDP) in the long run. B. an increased price level in the short run, but no effect on price level in the long run. C. increased real Gross Domestic Product (GDP) and increased employment in the long run. D. decreased real Gross Domestic Product (GDP) in the short run, but increased real Gross Domestic Product (GDP) in the long run.
In the early 1950s the two new factors that stimulated the United States' economy were ___________ and ____________.
Fill in the blank(s) with the appropriate word(s).
Which of the following is NOT correct regarding the theories of income distribution?
A) Dealing with how income ought to be distributed is a normative issue. B) The productivity standard for the distribution of income is stated "to each according to what they produce." C) The egalitarian principle of income distribution is "to each exactly the same." D) Dealing with how income should be distributed is a positive economic issue.