If expectations are formed rationally, wages and prices are completely flexible in both the short run and the long run, and policy is correctly anticipated, increases in aggregate demand will stimulate the economy to higher levels of Real GDP in
A) the short run or the long run.
B) neither the short run nor the long run.
C) the short run, but not in the long run.
D) the long run, but not in the short run.
B
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The advice to "go back to school to get retrained in a different field" would be most appropriate for which of the following types of unemployment?
A) frictional B) structural C) cyclical D) intentional
According to your text, disagreements about the relative efficiency of particular projects are usually disagreements about
A) the best way to conserve energy. B) the best way to conserve non-renewable resources of all kinds. C) scientific facts or technical processes. D) the relative value of particular goods to different people. E) who is entitled to make money from one project or another.
In Figure 2.1, a "D" for Demand would go in
A. Box 4. B. Box 5. C. Box 6. D. Box 2.
Consider that Britain is trying to maintain a fixed exchange rate with respect to the U.S. dollar. However, the present situation in the foreign exchange market is conducive for the British pound to depreciate with respect to the U.S. dollar. If the British government uses sterilized intervention in the foreign exchange market, then
A. Britain will be running an overall payments surplus. B. the British monetary authorities will be selling British government bonds. C. Britain is gaining official international reserves. D. the British monetary authorities will be buying British government bonds.