An expansionary monetary policy is most likely to produce an inflationary effect with little impact on output when the economy
a. is near full employment and the short-run aggregate supply curve is flat.
b. is near full employment and the short-run aggregate supply curve is steep.
c. has substantial unemployment and the short-run aggregate supply curve is steep.
d. has substantial unemployment and the short-run aggregate supply curve is flat.
B
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According to Keynesian economics, if there are unutilized resources in the economy and aggregate demand increases
A) real GDP will fall and price level will remain constant. B) real GDP will rise and price level will remain constant. C) real GDP will rise and price level will fall. D) real GDP will rise and price level will rise.
When economists speak of changes in GDP measured in constant dollars, they mean that
What will be an ideal response?
An upward shift in the Fed's policy reaction function is a(n) ________ of monetary policy, and the aggregate demand curve ________.
A. tightening; shifts left B. easing; shifts left C. easing; shifts right D. tightening; shifts right
If a product has a short-run elasticity of supply equal to zero, then an increase in the demand for the product will:
A. increase price and leave quantity sold unchanged. B. increase price and reduce the quantity sold to zero. C. have no effect on price or quantity sold. D. leave the price unchanged and reduce the quantity sold.