Other things the same, when the price level falls, interest rates
a. rise, so firms increase investment.
b. rise, so firms decrease investment.
c. fall, so firms increase investment.
d. fall, so firms decrease investment.
c
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The U.S. debt to GDP ratio in 2014 was
A) less than 20 percent. B) 42.4 percent. C) 74.1 percent. D) greater than 85 percent.
The theory that monetary policy conducted on a discretionary, day-by-day basis leads to poor long-run outcomes is referred to as the
A) adverse selection problem. B) moral hazard problem. C) time-inconsistency problem. D) nominal-anchor problem.
A monopolist would not be able to make a positive profit at any price output combination when
A) marginal cost is less than average total cost for one more unit of output. B) the average variable cost curve is everywhere above the marginal revenue curve. C) the minimum point of the average total cost curve lies to the right of the minimum of the average variable cost curve. D) the average total cost curve is everywhere above the demand curve.
According to adaptive expectations theory, which of the following would be the result of expansionary monetary and fiscal policies?
a. The economy self-corrects to the natural rate of unemployment. b. There is no long-run trade off between inflation and unemployment. c. The inflation rate rises. d. All of these.