Under the adaptive expectations hypothesis, which of the following is the effect of a shift to a more expansionary monetary policy?
a. In the short run, the real rate of output will be unaffected, but in the long run, it will increase.
b. In the short run, the unemployment rate will decrease, but in the long run, it will self correct to the natural rate of unemployment.
c. There will be a permanent increase in the real rate of output, but the inflation rate will also be a little higher.
d. In the short run, the impact on the real rate of output is uncertain, but in the long run, output will increase.
b
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If the Chinese government sets a price ceiling below the equilibrium price, the result will be I. an increase in the quantity demanded. II. a decrease in the quantity supplied. III. a shortage
A) I only B) I and II only C) III only D) I, II, and III
The external benefit of a good
A) equals its consumer surplus. B) equals its producer surplus. C) equals its total surplus. D) is a benefit from the good falling on people who are not the consumers of the good.
Suppose that your college offers you two payment plans for your last two years of college. You may either pay tuition of $20,000 per year at the beginning of each of the next two years, or pay just $38,000 before the start of freshman year
What would the interest rate have to be for you to be indifferent between these two deals? Explain.
A change in the price of one good results in a rotation of the budget line, so that it is steeper or flatter
a. True b. False Indicate whether the statement is true or false