The long-run equilibrium price level is the price level the economy is expected to reach when the
a. economy produces its potential output
b. Fed has stabilized interest rates
c. federal budget is balanced
d. discount rate equals the prime rate
e. inflation rate is zero
A
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Based on the data in Table 3.1, if Jesse and April choose to specialize and trade, then
A) April will specialize in painting snowboards and trade snowboards for kites. B) Jesse will specialize in painting snowboards and trade snowboards for kites. C) April will specialize in painting kites and trade kites for snowboards. D) None of the above; specialization and trade are not beneficial for Jesse and April.
Jack exported a rare painting illegally. This transaction will:
A) cause the GDP of his country to increase. B) not affect the calculation of his country's GDP. C) cause the GDP of the country he has exported it to increase. D) cause the GDP of his country to decrease.
A model with coordination failures has
A) agents that do not act rationally. B) multiple equilibria. C) a government that is too large. D) a tax rate that is too high.
Some economic historians argue that the Interstate Commerce Commission (ICC) was the first case of the "capture" of a federal regulatory commission. What does this mean?
(a) The railroads used the ICC to solve the problems of cartel management. (b) The users of the railroads—passengers and shippers—influenced the ICC to keep railroad rates high and the quality of those services high. (c) The railroads used the Commission to keep rates high and keep potential new railroads from entering the business. (d) Foreign investors high jacked the ICC to protect their railroad investrments.