If expectations are "rational," can the Fed control unemployment?
a. Yes, provided it announces policy in advance.
b. Yes, if it affects the aggregate demand curve.
c. No, because aggregate supply is vertical even in the short run.
d. No, because only fiscal policy can affect unemployment.
c
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Refer to Table 2-12. What is Honduras's opportunity cost of producing one sailboat?
A) 1/5 of a canoe B) 1.5 canoes C) 4 canoes D) 5 canoes
For all practical purposes, the supply of land is:
A. almost perfectly inelastic. B. negatively sloped. C. relatively elastic. D. perfectly elastic.
In the classical model, the aggregate supply curve is
A. upward sloping. B. downward sloping. C. vertical. D. horizontal.
If a good is produced by firms that generate external costs, the price consumers pay
A. will be efficient as long as it equals the marginal costs of the firms. B. will be too low. C. will be the correct price, but the quantity sold of the good will be too large. D. will be too high because the consumers end up paying the costs instead of the firm.