Based on the given figure, the economy is initially at point A on the monetary policy reaction function (RF1) and the aggregate demand curve (AD1). The actual rate of inflation is ?' and the Federal Reserve's target inflation rate is ?*1.
If the Federal Reserve lowers its target inflation rate to ?*2, then the Federal Reserve's monetary policy reaction function will ________ and the aggregate demand curve will ________.
A. shift to RF3; shift to AD3
B. shift to RF3; shift to AD2
C. shift to RF2; shift to AD3
D. shift to RF2; shift to AD2
Answer: C
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The supply curve shows
A. the same basic information as the demand curve. B. who will have an opportunity to produce or purchase an item. C. the quantity produced as a function of the price. D. plots of what quantities have been sold over the past few weeks or months.
If the total cost curve is greater than the total revenue curve at every level of output, the firm incurs a loss
Indicate whether the statement is true or false
If an average cost pricing rule is imposed on the firm in the figure above, the firm will make an economic profit of
A) zero. B) -$240. C) $150. D) $400.
A change in input prices has no impact on a firm’s budget line.
Answer the following statement true (T) or false (F)