A recessionary gap is the amount by which
A) the short-run equilibrium level nominal GDP is above the short-run real GDP.
B) the short-run equilibrium level nominal GDP is below the short-run real GDP.
C) total planned real expenditures exceed total planned production in the long run.
D) the short-run equilibrium level of real GDP is below the full-employment level of real GDP.
D
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The main difference between a sterilized intervention and unsterilized intervention in the foreign exchange market is:
A) a sterilized intervention is coordinated with other nations B) an unsterilized intervention does not change the exchange rate C) an unsterilized intervention does not change the monetary base D) a sterilized intervention does not change the monetary base
Which of the following statements is an example of positive economic analysis?
A) The inflation rate is too high. B) The government should worry less about inflation and more about unemployment. C) If the government increases the rate of growth of the money supply, the inflation rate will increase, ceteris paribus. D) The elderly live on a fixed income, so the government has an obligation to keep inflation rates low.
The administrative burden of regulating price in a monopolistically competitive market is
a. small due to economies of scale. b. large because price is usually below marginal cost. c. large because of the large number of firms that produce differentiated products. d. small because firms produce with excess capacity.
Unscrupulous managers have learned ways to manipulate stock options and undermine their benefits to stockholders. Discuss some provisions that could be built into the process to curb such practices.
What will be an ideal response?