Under the adaptive expectations hypothesis, which of the following is the most likely short-run effect of a move to a more expansionary monetary policy?
a. higher prices and no change in real output
b. higher prices and expansion in real output
c. no change in prices but an expansion in real output
d. no change in either prices or real output
B
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________ is defined as any attempt to capture consumer surplus, producer surplus or economic profit
A) Search B) Rent seeking C) Maximizing monopoly profits D) Price discrimination
If people increase their expected rate of interest, the speculative demand for money curve will _____ and money supply will _____
a. shift downward, remain unchanged. b. shift upward; remain unchanged. c. not be affected; shifts upward. d. not be affected; not be affected.
What does macroeconomic theory predict as the main economic effect of a reduction in the budget deficit?
A. Lower real interest rates B. A drop in the exchange rate C. An increase in net exports D. All of these responses are correct.
It is easy to discern the difference between vigorous competition and the exercise of monopoly power.
Answer the following statement true (T) or false (F)