Contractionary monetary policy causes:
a. Aggregate demand to rise, prices to rise, and real GDP to fall.
b. Aggregate demand to rise, prices to rise, and real GDP to rise.
c. Aggregate demand to fall, prices to fall, and real GDP to fall.
d. Aggregate supply to rise, prices to rise, and real GDP to rise.
e. Aggregate supply to rise, prices to rise, and real GDP to fall.
.C
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In the short-run macro model, which of the following is the cause of cyclical unemployment?
a. It takes time for people to move to new jobs. b. Insufficient aggregate spending. c. It takes time for firms to find new employees. d. It takes time for people to retrain. e. Fewer people want to work than before.
Which of the following is true about the relationships among various cost curves?
a. When MC exceeds ATC, ATC must be rising. b. When MC exceeds ATC, ATC could be rising or falling. c. When ATC is falling, MC must exceed ATC. d. When TC is rising, MC must exceed TC. e. TC falls when AFC falls.
Why is the production possibilities frontier (PPF) typically bowed-outward? Under what circumstances would the PPF be a straight line?
A firm with total revenue of $500, total cost of $700, and variable cost of $400 should continue to operate its production facility.
Answer the following statement true (T) or false (F)