If actual inflation differs from expected inflation, what is the slope of the aggregate supply curve?
a. It is horizontal in the short and long run.
b. It is vertical in the short and long run.
c. It is vertical in the short run and upward sloping in the long run.
d. It is upward sloping in the short run and vertical in the long run.
d
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A decrease in the discount rate will
A) have an unclear effect on the money supply. B) decrease the money supply. C) increase the money supply. D) not affect the money supply.
Refer to Figure 12.5. If exchange rates are floating, an expansionary monetary policy would best be represented by a movement from ________ in panel (a) and a corresponding movement from ________ in panel (b)
A) point A to point B; point X to point Y B) point C to point A; point X to point Y C) point D to point C; point Y to point X D) point B to point D; point Y to point X
Franco's Frozen Ice produces Italian flavored ice that is sold in the freezer section of grocery stores. Currently, Franco's does not have a fixed advertising budget and advertises in grocery stores' weekly advertising flyers and on the radio. A unit of advertising in the weekly flyers costs $1,500 and a unit of advertising on the radio costs $4,500. At their current advertising levels, the
marginal benefit of advertising in the flyer is $1,750 and the marginal benefit of advertising on the radio is $5,000. Which of the following is true? A) To maximize profits, Franco's should increase the amount of advertising in flyers and on the radio. B) To maximize profits, Franco's should increase the amount of advertising in flyers, but not change the amount of advertising on the radio. C) Franco's is currently maximizing its profits from advertising. D) To maximize profits, Franco's should decrease the amount of advertising in flyers and on the radio.
The concept of surplus can:
A. show the benefits of introducing new markets. B. show who benefits from a tax. C. show who loses from minimum wage. D. show any of these.