Which of the following scenarios would make monetary policy the most difficult to address?
A) A worldwide spike in oil prices resulting in higher production costs.
B) A rise in unemployment that causes consumers to spend less.
C) A reduction in business confidence that leads to a reduction in investments
D) A booming housing market that causes inflation to rise.
Ans: D) A booming housing market that causes inflation to rise.
You might also like to view...
Should the level of pollution be reduced to zero, and if not, then to what level?
What will be an ideal response?
Consider a small open economy with desired national saving of Sd = 200 + 10,000rw and desired investment of Id = 1000 - 5000rw. If rw = 0.05, and output = 5000, then absorption equals
A) 5100. B) 5050. C) 4950. D) 4900.
Suppose that, in the long run, a dairy's variable costs are VC = 2Q2 (where Q is the number of gallons of milk produced each day), its marginal cost is MC = 4Q and there is an avoidable fixed cost of $50 per day. In the long run there is free entry into the market. What is the efficient scale of production?
A. 5 gallons per day B. 100 gallons per day C. 20 gallons per day D. 50 gallons per day
Which of the following will occur as a result of a tax cut?
A) private saving decreases B) investment decreases C) the trade balance improves D) the trade balance worsens E) the budget deficit decreases