The concept of the monetary policy rule is based on the assumption that:
A. discretionary fiscal policy crowds out investment spending.
B. the natural rate of unemployment is constant in the long run.
C. monetary policy lags are shorter than fiscal policy lags.
D. the velocity of money is constant in the short run.
Answer: D. the velocity of money is constant in the short run.
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If monopolistically competitive firms in an industry are making an economic profit, then new firms will enter the industry and the product demand facing existing firms will
A. become less elastic. B. decrease. C. increase. D. not be affected.
U.S. Financial Crisis. Suppose that foreigners had reduced confidence in U.S. financial institutions and believed that privately issued U.S. bonds were more likely to be defaulted on.
a. rise which by itself would increase aggregate demand. b. rise which by itself would decrease aggregate demand. c. fall which by itself would increase aggregate demand.
Judging from this graph, what would the individual firm charge if it increased its output to 400 bushels of wheat?
a. $3
b. $4
c. $5
d. $6
GDP stands for __________.?
A. gross domestic price. B. general domestic product. C. gross domestic product. D. gross detailed product.