The objective of the Fed and the government is to
A. prevent asset bubbles by recognizing them in real time.
B. mitigate the consequences of asset bubbles by recognizing them in real time.
C. prevent asset bubbles by recognizing bad lending practices.
D. mitigate the consequences of asset bubbles by recognizing bad lending practices.
Answer: D
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Which of the following statements is true about supply?
A. As price decreases, producers are willing and able to put more of the good on the market for sale. B. Supply refers to the amount of inventory that sellers have in their warehouses. C. As price increases, producers are willing and able to put more of the good on the market for sale. D. There is an inverse relationship between price and quantity supplied.
In reality, AD rarely ________; however, the economy performs as though it does when it ________
A) decreases; fluctuates with potential GDP B) increases; decreases at a pace much slower than potential GDP C) stagnates; increases at a pace much faster than potential GDP D) decreases; increases at a pace much slower than potential GDP E) decreases; increases at a pace much faster than potential GDP
If the expected price level increases at the same time that the federal government cuts taxes, in the short run
A) aggregate output and the price level will both increase. B) aggregate output will increase, but the price level will fall. C) aggregate output and the price level will both fall. D) the price level will increase, but aggregate output may either increase or decrease.
A monopolist earning economic profit in the short run determines that at its present level of output, marginal revenue is $23 and marginal cost is $30. Which of the following should the firm do to increase profit?
A. Raise price and lower output. B. Lower price and lower output. C. Raise price and raise output. D. Lower price and raise output.