Assume the economy is experiencing an inflationary gap, Keynesian economists believe that:
a. flexible wages will restore full employment.
b. the Federal Reserve should lower the interest rate.
c. the federal government should decrease spending to shift the aggregate demand curve leftward.
d. the federal government should increase spending to shift the aggregate demand curve rightward.
c
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For the monopolistically competitive firm
A) P = MR > AR. B) P > MR = AR. C) Price (P) = Marginal Revenue (MR) = Average Revenue (AR). D) P = AR > MR.
Two main reasons that the deficit may increase are:
A. decreases in tax revenues and government spending. B. decreases in tax revenues and an increase in government spending. C. increases in household spending and decreases in firm spending. D. changes in interest rates and unemployment.
The money aggregate M1 includes each of the following, except:
A. demand deposits at commercial banks. B. currency in the hands of the public. C. currency in the vaults of commercial banks. D. travelers checks that have been issued.
The perfectly competitive firm cannot influence the market price because
A. its production is too small to affect the market. B. its costs are too high. C. it has market power. D. a few buyers have control over the market price.