Suppose the economy currently has an inflationary gap. The Fed engages in contractionary monetary policy. The impact of contractionary monetary policy will be to
A. decrease aggregate demand, decrease prices, and increase real GDP.
B. decrease aggregate demand, decrease prices, and decrease real GDP.
C. increase short-run aggregate supply, decrease in prices and decrease in real GDP.
D. increase short-run aggregate supply, decrease prices and increase real GDP.
Answer: B
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Net exports are the sum of
A) the current account balance and capital account balance. B) the balance of payments accounts. C) exports and imports. D) the private sector balance and the government sector balance. E) the current account balance and the official settlements account balance.
The table above shows the production possibilities frontier for the nation of Isolanda
a) Find the marginal cost of a pound of fish using the above PPF. b) How does the marginal cost of a pound of fish change as more fish are caught?
Long-run economic profit does not exist for fixed factors like land because
A) bidding drives up the price of the factor until no economic profit exists. B) there is no market for such factors. C) these factors have L-shaped isoquants. D) these factors will earn economic profits.
Between 1890 and 1914, the gold stock of the world doubled, but world prices fell during this time
Indicate whether the statement is true or false