A downward shift in the Fed's reaction function is equivalent to:
A. an increase in the Fed's long-term target for inflation.
B. a downward shift of short-run aggregate supply
C. an upward shift of short-run aggregate supply
D. a decline in the Fed's long-term target for inflation.
Answer: A
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Use the following table to answer the question below. Dave's Production Possibilities SchedulePounds of Green BeansPounds of Corn0160201204080604080 0Dave's production possibilities schedule demonstrates that
A. he can produce as much as he wants. B. he does face scarcity. C. he does not face scarcity. D. he can produce an unlimited amount of green beans if he gives up enough corn.
In 1980, one Zimbabwean dollar was worth 1.47 U.S. dollars. By the end of 2008, the exchange rate was one U.S. dollar to 2 billion Zimbabwean dollars
When an economy experiences rapid increases in the price level such as what occurred in Zimbabwe, the economy is said to experience A) inflation. B) stagflation. C) hyperinflation. D) deflation.
The "naïve" Keynesian model is unrealistic because it
A. Does not take into account probable changes in the price level as the economy approaches full employment. B. Assumes that AS is upward sloping when it is more probably horizontal. C. Assumes that the price level decreases as AD increases. D. Does not account for changes in output due to the multiplier.
In a perfectly competitive situation, the profit-maximizing hiring situation for all inputs being used is where
A. the MRP of each input is greater than the price of each input. B. the MRP of each input is less than the price of each input. C. the MRP of each input is equal to the price of each input. D. There is no relationship between MRP and the prices of the inputs.