Which of the following models do not believe that there exists a short run tradeoff between higher inflation and lower unemployment?
a. Keynesians
b. monetarists
c. new classical
d. real business cycle
e. none of the above
D
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The demand for loanable funds curve is
A) downward sloping when plotted against the real interest rate. B) vertical at the full employment level of investment. C) constant at the maximum expected profit rate. D) upward sloping when plotted against the real interest rate.
A perfectly competitive wheat farmer in a constant-cost industry produces 3,000 bushels of wheat at a total cost of $36,000. The prevailing market price is $15. What will happen to the market price of wheat in the long run?
A) The price falls to $12. B) The price rises above $15. C) The price remains constant at $15. D) There is insufficient information to answer the question.
The monetary transmission mechanism that links monetary policy to GDP through real interest rates and investment spending is called the
A) traditional interest-rate channel. B) Tobins' q theory. C) wealth effects. D) cash flow channel.
In the two-period model with production, an increase in anticipated future total factor productivity
A) has no effect on domestic output, but reduces the current account surplus. B) increases domestic output and increases the current account surplus. C) reduces domestic output, and increases the current account surplus. D) has no effect on domestic output, but increases the current account surplus.