Economists who favor policy activism argue that the United States economy is NOT always in equilibrium because
A) wage and price rigidities exist.
B) the markets are over regulated.
C) the Federal Reserve's monetary policy is too restrictive.
D) the national debt is too large.
A
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Rachel babysits for her sister for no pay. When she babysits for someone else she charges $8 an hour. When is Rachel's babysitting included in GDP?
a. When she babysits for her sister and when she babysits for someone else. b. When she babysits for her sister, but not when she babysits for someone else. c. When she babysits for someone else, but not when she babysits for her sister. d. Neither when she babysits for her sister nor for someone else.
Using Figure 1 above, if the aggregate demand curve shifts from AD1 to AD2 the result in the long run would be:
A. P1 and Y2. B. P2 and Y2. C. P3 and Y1. D. P2 and Y3.
Assume that a fixed exchange rate is overvalued. Describe the situation of a speculative crisis against this currency. What can the central bank do to defend the currency? Why might the alternative of devaluation be preferable?
What will be an ideal response?
When the number of substitutes increase, the demand curve for a monopolist will
A) not change. B) become more elastic. C) become more inelastic. D) become steeper.