The primary reason why the Fed cannot systematically surprise the public with its monetary policy is
A. the presence of productivity shocks that generate real business cycles independent of the monetary side of the economy.
B. the presence of propagation mechanisms within the economy.
C. the presence of rational expectations among the public.
D. the nonneutrality of money.
Answer: C
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A profit-maximizing, monopolistically competitive firm always operates: a. at the minimum of average total cost
b. at the point where demand is unit elastic. c. with excess capacity. d. at an economically efficient scale.
A natural monopoly is a market in which a single firm:
A. owns a key resource or input into the production of the good. B. gains market share over time through aggressive tactics. C. can produce the entire market quantity at a lower cost than multiple firms. D. is protected from competition through government legislation.
Which of the following consumers would most likely be helped by a price ceiling?
a. Because of his low income, Ben can afford to rent an apartment at only $800 per month. b. Because of her significant raise, Juanita can afford a $30,000 car. c. Because of his sizable inheritance, Jacques can add an expensive addition to his home. d. Because of her steady income, Roberta can rent a vacation home in Hawaii.
NPR ("Certain Green Industries Have Job Openings", November 12, 2008 ) reported on a story about wind turbine manufacturers in Ohio having trouble finding skilled workers
The report noted that as a result tens of thousands of people having been laid off, there is "a huge pool of job-seekers." The firms claim to "offer good pay and benefits." A representative from the United Steelworkers claims that their union members have easily transferrable skills, but the pay is too low, around $30,000 annually. A manager at Apollo Alliance says that workers in the new industry need different skills than those in the old steel industry. The type of unemployment described in the story is ________ unemployment.
A) cyclical
B) structural
C) frictional
D) efficiency wage