If the economy is experiencing an inflationary gap, Keynesian economists advocate allowing flexible wages to shift the short-run aggregate supply curve (SRAC) upward and restore full employment
a. True
b. False
Indicate whether the statement is true or false
False
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The purchase of Treasury securities by the Federal Reserve will, in general
A) not change the money supply. B) decrease the quantity of reserves held by banks. C) increase the quantity of reserves held by banks. D) not change the quantity of reserves held by banks.
Classical macroeconomists argue that the short-run Phillips curve ________ represent a usable trade-off for policymakers because ________
A) does; people have rational expectations B) does; people do not have rational expectations C) does not; people do not have rational expectations D) does not; people have rational expectations
Absent an ability to price discriminate, if a monopoly wants to sell more output, it must
a. raise its price b. lower its price c. increase barriers to entry d. obtain government permission e. negate its patent protection
Suppose Sarah owns a small company that makes wedding cakes. The accompanying table shows how Sarah's total cost varies depending on the number of wedding cakes she makes each day.Number of Cakes Per DayTotal Cost Per Day0$1001$1802$2203$3004$4005$5206$660 If the market for wedding cakes is perfectly competitive, and wedding cakes sell for $125 each, then at her profit-maximizing level of output, Sarah's profit will be ________ per day.
A. $105 B. $100 C. $625 D. $90