Suppose that a drought significantly reduces agricultural production one year. In addition, suppose the Fed accommodates this supply shock by implementing an expansionary monetary policy. Which of the following would you expect to occur as a result of these changes?
a. The short-run aggregate supply curve will shift to the right, the short-run Phillips Curve will shift to the left, and the accommodating monetary policy will raise inflation while lowering unemployment.
b. The short-run aggregate supply curve will shift to the right, the short-run Phillips Curve will shift to the left, and the accommodating monetary policy will increase unemployment while lowering inflation.
c. The short-run aggregate supply curve will shift to the left, the short-run Phillips Curve will shift to the right, and the accommodating monetary policy will raise inflation while lowering unemployment.
d. The short-run aggregate supply curve will shift to the left, the short-run Phillips Curve will shift to the right, and the accommodating monetary policy will increase unemployment while lowering inflation.
c
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A natural monopoly occurs when
A) one firm owns all the vital resources needed to produce a particular good. B) economies of scale allow one firm to supply the entire market at the lowest possible cost. C) a few firms collude to act as a single firm. D) one firm captures all the consumer surplus.
Refer to the payoff matrix below. Which of the following is true for Best Lights?
A) They do not have a dominant strategy.
B) Their pure strategy is to set a Low Price.
C) They do not have a pure strategy.
D) Their pure strategy is to set a High Price.
Interest provides an incentive for households to defer current consumption
a. True b. False
A graphic illustration of the cumulative size distribution of income is known as the
A. Okun curve. B. Gini coefficient. C. Size distribution of income. D. Lorenz curve.