Deflation is:
A. a sustained rise in the aggregate price level.
B. negative inflation.
C. as common as inflation.
D. a decline in inflation.
B. negative inflation.
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What are rational expectations, and how might rational expectations make monetary policy ineffective?
What will be an ideal response?
Independent workers using specialized capital save the costs of contracting but risk:
a. generalization. b. opportunism. c. inefficiency. d. over-utilization.
If a monopolist calculates its marginal revenue to be $15 and marginal cost to be $16, then the monopolist should:
A. lower its price. B. decrease its output. C. increase its output. D. leave its output and price unchanged.
Suppose households unexpectedly decrease consumption. Which of the following will occur as a result of this unexpected reduction in consumption?
A) an increase in stock prices B) a reduction in stock prices C) no change in stock prices D) an ambiguous effect on stock prices