If the long-run equilibrium of an economy is disrupted by an unexpected shift to a more expansionary monetary policy, the policy shift will
a. reduce aggregate demand and real output in the short run.
b. lead to a higher rate of unemployment in the short run.
c. stimulate real output in the short run, but in the long run, its primary impact will be on the general level of prices.
d. lead to an increase in the general level of prices in the short run, but in the long run, its primary impact will be an expansion in real output.
C
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One problem with compensation systems is that
A) sometimes a manager is rewarded for an objective other than maximizing profits. B) managers are often paid too much. C) owners sometimes want to pursue social objectives. D) the Dodd-Frank Act of 2010 requires shareholder votes on compensation that are non-binding.
In the early 2000s, laws requiring banks and mortgage brokers to disclose the terms of home loans:
A. prevented Americans from entering into mortgage contracts that they did not understand. B. were an example of how the government can act to solve the moral hazard problem. C. were so numerous and detailed that borrowers didn't read or understand the information the companies had disclosed. D. reduced statistical discrimination in the home mortgage market.
The demand curve faced by a monopolistically competitive firm
a. is the same as the market demand curve b. is less elastic than the one faced by firms in perfect competition c. is perfectly elastic d. is perfectly inelastic e. has a constant slope
If a firm is earning a normal profit, but zero economic profit, at the point where MR = MC, the firm should
a. shut down b. increase output and decrease price c. increase output and increase price d. decrease output and increase price e. remain at its current level of output