Assume that the Fed has a target inflation rate of 2% and that the values for how much the nominal target federal funds rate responds to a deviation of inflation from its target, g, and how much the nominal target federal funds rate responds to real
GDP, h, are both 0.5. According to the Taylor rule, if inflation increases by 6%, the real interest rate will increase by A) 3%.
B) 4%.
C) 6%.
D) 9%.
A
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From an economist's perspective, why are public restrooms often dirtier than restrooms in your home?
A. Restrooms in your house are easier to clean. B. Property rights give you an incentive to clean your restrooms. C. There are incentives like a salary for janitors to clean the public restrooms. D. More people use the public restrooms.
Which of the following accurately describes the motivation behind predatory pricing?
a. to drive out competitors b. to increase sales c. to tie goods together d. to attract new customers
Consider a barter situation where you have pens and you want pencils. To achieve your objective there must be a(n):
A. use of capital goods. B. coincidence of wants. C. entry and exit from the market. D. large number of sellers.
Assume the graph shown represents the market for bottles of wine and was originally in equilibrium with D and S. Something changes and demand shifts to D2. Which of the following is true?
A. Equilibrium quantity increased by 20. B. Equilibrium price increased by $5. C. Equilibrium quantity increased by 30. D. Equilibrium price increased by $15.