Assume individuals consider only the short run effects of changes in future macro variables when forming expectations of future output and future interest rates. Suppose individuals expect the central bank to pursue a monetary expansion in the future. Given this information, we know with certainty that
A) current output and the current interest rate will both increase.
B) current output will decrease.
C) the current interest rate will decrease.
D) the current output effects are ambiguous.
A
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If the price of pizzas has risen from $4 to $5 at the same time that the price of an hour of aerobics class has risen from $20 to $30, then
a. pizzas have become relatively more expensive. b. aerobics classes have become relatively more expensive. c. the relative prices of pizzas and aerobics classes have remained constant. d. workers' real income must have decreased.
Suppose that Venezuela produces beef and oil and it can switch production between each at a constant rate. If the most beef it can produce is 300 million pounds and the most oil it can produce is 50 million barrels, then what is the opportunity cost of a pound of beef and what is the opportunity cost of a barrel of oil?
The invention of genetically engineered corn that prevents yield loss due to corn rootworm will
A. shift the supply curve of US corn to the right. B. shift the supply curve of US corn to the left. C. shift the demand curve for US corn to the right. D. shift the demand curve for US corn to the left.
A sales tax will be divided so that
A) the buyers pay the full amount if supply is perfectly inelastic. B) the sellers pay the full amount if supply is perfectly inelastic. C) the sellers pay the full amount if supply is perfectly elastic. D) both buyers and sellers pay some of the tax if supply is perfectly elastic.