According to the quantity theory of money, if the long-run economic growth rate is 2.5%, by how much should the Fed increase the money supply if it wants inflation to be 2%?
A) 0.5%
B) 1.25%
C) 4.5%
D) 5%
C
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Under what conditions does an oligopoly market result in the same outcome as monopoly? What does this imply for the oligopoly's long-run profits?
What will be an ideal response?
If a market with monopolistic competition became a monopoly market, output would:
A. fall. B. be incomparable. C. not change. D. rise.
Refer to the information provided in Figure 2.4 below to answer the question(s) that follow.
Figure 2.4Refer to Figure 2.4. The economy moves from Point E to Point B. This could be explained by
A. a change in society's preferences for hybrid cars versus motorcycles. B. an increase in economic growth. C. an increase in unemployment. D. a reduction in unemployment.
Refer to the figure. Assuming this market is representative of the economy as a whole, this economy:
A. is highly susceptible to inflation.
B. faces fluctuating output levels whenever there is a demand shock.
C. is capable of always producing at its optimal capacity.
D. is largely immune to business cycles.