A change in ________ results in a movement along the short-run aggregate supply curve but does not shift the short-run aggregate supply curve
A) the money wage rate
B) technology
C) the quantity of capital
D) the price level
D
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Which of the following is an important implication of the rational expectations argument?
A) Since people form their expectations using all available information, the use of monetary policies to eliminate output gaps will lead to inflation. B) Since any consistent set of monetary policies will be learned and anticipated by a population with rational expectations, policies designed to influence the economy to a level of production other than the potential real GDP will be ineffective. C) Although people may revise their expectations about the price level and future economic activity, they cannot act on these changes because in reality, wages and prices are sticky. Thus, policy intervention is necessary. D) Policymakers must constantly monitor economic activity and revise their economic policy goals to keep up with changing expectations of a population with rational expectations.
An important problem with the gold standard was that
A) it was too complicated and restricted business activity. B) a country did not have control of its domestic monetary policy. C) exchange rates tended to fluctuate a great deal, making it difficult for businesses to make long-run plans. D) one country could easily manipulate the system to its advantage and the disadvantage of other countries.
All of the following are ways that the government can correct for positive externalities EXCEPT
A) by subsidizing the consumption of the good. B) producing the good itself. C) by regulation. D) by assessing an effluent fee.
If the opportunity cost of corn to wheat is 3:1 in the United States and 5:1 in France, both countries would benefit from trade if the actual terms of trade between corn and wheat were 4:1.
Answer the following statement true (T) or false (F)