The objectives of monetary policy are ________.
What will be an ideal response?
maximum employment, stable prices, and moderate long-term interest rates
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When a perfectly competitive industry is taken over by a monopoly, some consumer surplus is transferred to the monopolist in the form of
A) marginal cost. B) economic profit. C) deadweight loss. D) taxes. E) average variable cost.
The Volcker Disinflation (1980-1986 ) was costly in terms of output and unemployment. Would it not have been better to reduce inflation with a positive supply shock, rather than a negative demand shock?
What will be an ideal response?
If Donald receives a pay raise and the income effect outweighs the price effect on his labor supply decisions, he will work:
A. more hours. B. less hours. C. the same amount. D. less hours initially but eventually work more.
Which of the following is not true about the U.S. trade balance since 1979?
a. The balance of trade has been in deficit. b. During recessions the balance has usually been flat. c. The balance of trade has been in surplus. d. When the economy expanded, the demand for imports increased. e. When the economy expanded, the trade balance worsened.