Suppose that there is a positive aggregate demand shock and the central bank commits to an inflation rate target. If the commitment is credible, then
A) the public's expected inflation will remain unchanged.
B) the short-run aggregate supply curve will not shift.
C) over time inflation will fall back down to the inflation target.
D) all of the above.
E) both A and B.
D
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Which of the following statements is correct?
A) In the short run, if a firm chooses to produce no output (i.e., shut down) its total costs of production will equal its total fixed costs. B) If a firm decides to shut down, its short-run total costs will equal 0. C) As a firm increases output in the short run, the change in total costs is equal to the change in total variable costs. D) A firm minimizes its total costs of production when average variable cost is minimized.
For any firm, price always equals
A. average revenue. B. marginal revenue. C. marginal cost. D. marginal profit.
Which is not an example of capital at a book printing company?
a. the office building where the printing company is located b. the paper on which books are printed c. the oil used to heat the factory d. the men and women who work in the accounting office
A perfectly competitive firm faces a:
A. perfectly elastic demand function. B. demand function with unitary elasticity. C. perfectly inelastic demand function. D. None of the answers is correct.