Arguments for discretionary policies include
A) policy rules can be too rigid because they cannot foresee every contingency.
B) the time-inconsistency problem can lead to poor economic outcomes.
C) discretionary policies pursue overly expansionary monetary policies to boost employment in the short run but generate higher inflation in the long run.
D) all of the above.
A
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Although imperfect, which of the following is used as a measure of the standard of living?
A) real GDP ÷ population B) real GDP × population C) nominal GDP × population D) nominal GNP ÷ population E) nominal GNP × population
The above figure shows Katie's consumption possibilities. The relative price of a restaurant meal is
A) 1 movie ticket. B) 0.25 movie tickets. C) 4 movie tickets. D) 2 movie tickets.
In an effort to serve consumers who have become more health conscious, a number of firms have begun developing small electronic devices which allow people to monitor various health conditions
These firms are reacting to which of the three key economic ideas? A) Optimal decisions are made at the margin. B) Firms attempt to maximize revenues. C) People respond to economic incentives. D) People are rational.
Suppose when the price of a cookie is $2.50, the quantity demanded is 50, and when the price is $1, the quantity demanded is 200. Using the midpoint method, the price elasticity of demand is:
A. –1.40 B. –0.72 C. –140 D. –7.2