As of 2009, most countries in the world live in autarky
Indicate whether the statement is true or false
FALSE
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Based on the figure below. Starting from long-run equilibrium at point C, a tax cut that increases aggregate demand from AD to AD1 will lead to a short-run equilibrium at point ________ and eventually to a long-run equilibrium at point ________, if left to self-correcting tendencies. 
A. D; C B. B; C C. B; A D. D; B
Among the prospective rules that set target variables directly, only the nominal GDP rule
A) provides a nominal anchor. B) is easy for the Fed to achieve. C) allows a neutral response to a supply shock. D) is insulated from the effects of unstable velocity.
Suppose a firm anticipates that a particular R&D expenditure of $100 million will result in a new product and thus create a one-time added profit of $108 million a year later. The firm will:
A. undertake the R&D expenditure if its interest-rate cost of borrowing is 12 percent. B. undertake the R&D expenditure if its interest-rate cost of borrowing is 10 percent. C. not undertake the R&D expenditure if its interest-rate cost of borrowing is 9 percent. D. not undertake the R&D expenditure if its interest-rate cost of borrowing is 7 percent.
Suppose the economy is experiencing inflation. What would be the interpretation of how a restrictive monetary policy would address this problem?
What will be an ideal response?