If policymakers attempt to offset an adverse inflation shock with monetary ________, the resulting long-run equilibrium will be at ________ inflation rate compared to allowing the self-correcting mechanism return the economy to potential output.
A. easing; a lower
B. tightening; a lower
C. tightening; a higher
D. easing; a higher
Answer: D
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In setting their prices, price searcher firms ignore
A) demand. B) marginal cost. C) the prices of competitors. D) all of the above. E) none of the above.
Assuming the firm in the graph shown is producing Q1 and charging P3, it is likely showing the cost and revenue curves of a monopolistically competitive firm that is:
These are the cost and revenue curves associated with a firm.
A. making positive economic profits.
B. earning negative economic profits.
C. in long-run equilibrium.
D. All of these statements are true.
Which of the following is true of an annually balanced federal budget? a. Most economists agree that the federal government should balance its budget just as each household does. b. Such a policy would require the government to increase its spending when tax receipts decrease
c. Such a policy became popular between the 1930s and 1960s. d. Such a policy guarantees that the economy is its potential level. e. Such a policy could worsen a contractionary gap.
Special interest groups are subsets of __________ that hold (usually) intense preferences for or against a particular government service, activity, or policy
A) the general population B) bureaucrats C) elected officials D) candidates for political office E) all of the above