Most economists believe that in the short run
a. real and nominal variables are determined independently and that money cannot move real GDP away from its long-run trend.
b. real and nominal variables are determined independently but that money can temporarily move real GDP away from its long-run trend.
c. real and nominal variables are highly intertwined but that money cannot move real GDP away from its long-run trend.
d. real and nominal variables are highly intertwined and that money can temporarily move real GDP away from its long-run trend.
d
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Screening refers to
a. private schools selecting only the students who are easiest to teach b. employers requiring a high-school diploma as a way of rejecting unqualified applicants c. governments deciding who should receive health care d. universities using standardized testing to decide who should enter e. none of the above
Diminishing marginal utility of wealth implies that the utility function
a. has increasing slope and a person is risk averse. b. has increasing slope and a person is not risk averse. c. has decreasing slope and a person is risk averse d. has decreasing slope and a person is not risk averse.
Firms are motivated to minimize production costs because:
A. it is the most environmentally friendly way to produce goods. B. least-cost production techniques use the smallest total quantity of resources. C. competitive pressures in the market will drive out higher-cost producers. D. the government provides tax credits and subsidies to low-cost producers.
Refer to the diagram. Discretionary fiscal policy designed to slow the economy is illustrated by:
A. the shift of curve T 1 to T 2 .
B. the shift of curve T 2 to T 1 .
C. a movement from a to c along curve T 2 .
D. a movement from d to b along curve T 1 .