To achieve long-run equilibrium in an economy with a recessionary gap, without the use of stabilization policy, the inflation rate must:
A. not change.
B. increase.
C. decrease.
D. either increase or decrease depending on the relative shifts of AD and AS.
Answer: C
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The money supply is ________ related to the nonborrowed monetary base, and ________ related to the level of borrowed reserves
A) positively; negatively B) negatively; not C) positively; positively D) negatively; negatively
Nick Lewis is a strict vegetarian and dislikes the sight and smell of meat products. He buys a raffle supporting the Josh Gottheil Memorial Fund for Lymphoma Research and wins the 3rd prize: a year's supply of hamburger meat. He is willing to trade with his meat-loving friends, and a trade ensues. This is because the
a. marginal utility of meat for them is positive and for Nick, it's negative b. total utility of meat for them and for Nick is positive c. MU/P of the goods his friends trade away is higher than their MU/P of meat d. MU/P of meat for Nick is higher than the MU/P of the goods he gets for the meat e. his friends have a negative total utility of meat, but wish to help Nick
Which of the following describes how import quotas on sugar generally affect consumer surplus as shown in Exhibit 2?
a. eliminated
b. unchanged
c. decreased
d. increased
Figure 10-5
In Figure 10-5, which graph best illustrates the situation of an economy reacting to an inflationary gap through an increase in wage levels?
A. (1) B. (2) C. (3) D. -(4)