The most important job of the Federal Reserve is to ______.
Fill in the blank(s) with the appropriate word(s).
conduct monetary policy
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If the money supply increases 10-percent, velocity decreases 5-percent, and the price level increases 6-percent, then the change in real GDP is
a. 1. b. 4. c. -1. d. 5.
Under the adaptive expectations hypothesis, which of the following is the effect of a shift to a more expansionary monetary policy?
A. In the short run, the real rate of output will be unaffected, but in the long run, it will increase. B. In the short run, the unemployment rate will decrease, but in the long run, it will self correct to the natural rate of unemployment. C. There will be a permanent increase in the real rate of output, but the inflation rate will also be a little higher. D. In the short run, the impact on the real rate of output is uncertain, but in the long run, output will increase.
The greater the the number and closeness of substitutes available between monopolistically competitive firms
A) the greater the ability of a firm to raise its price above the price of close substitutes. B) the smaller the ability of a firm to raise its price above the price of close substitutes. C) the more inelastic the demand curve. D) the greater the positive economic profits for a single firm.
Classical economists suggest that unemployment is a short-lived phenomenon because
A. wages adjust quickly to equilibrate quantity of labor demanded with quantity of labor supplied. B. wages remain unchanged when the quantity of labor supplied exceeds the quantity of labor demanded. C. wages remain unchanged when the quantity of labor demanded exceeds the quantity of labor supplied. D. wages tend to rise slowly when the quantity of labor demanded equals the quantity of labor supplied.