If the economy is in short-run disequilibrium, an economist following classical theory would advocate that the Federal Reserve make appropriate changes in the:
a. federal funds rate.
b. reserve requirement.
c. none of these choices.
d. money supply.
c
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The Federal Reserve's principal tool in the manipulation of aggregate demand is the personal income tax
a. True b. False Indicate whether the statement is true or false
From 1994 to 1999, inflation in the United States was relatively constant at approximately 2.5 percent. When inflation is constant for an extended period, which of the following is most likely?
a. People will correctly anticipate the actual inflation rate, and the actual rate of unemployment will approach the natural rate of unemployment. b. People will correctly anticipate the actual inflation rate, and the actual rate of unemployment will exceed the natural rate of unemployment. c. The actual inflation rate will be greater than the anticipated rate, leading to an actual rate of unemployment that exceeds the natural rate of unemployment. d. Actual inflation will be less than the anticipated rate, leading to an actual rate of unemployment that exceeds the natural rate of unemployment.
How does the market mechanism answer the WHAT, HOW, and FOR WHOM questions?
What will be an ideal response?
Over all levels of output, if a firm's long-run average cost curve declines as output increases, then
A. small firms and large firms will have identical average costs. B. there should be a large number of firms in the industry. C. there should be only one firm in the industry. D. small firms would have lower average costs of production than large firms.