Active stabilization policy can be rationalized in the New Keynesian model because
A) it makes it possible to obtain zero inflation.
B) the government knows best.
C) it counteracts the influence of unions.
D) it allows a faster return to economic efficiency.
D
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A price taking firm employs each of its inputs into production until its marginal product is equal to 1.
Answer the following statement true (T) or false (F)
Everything else held constant, an increase in expected inflation, lowers the expected return on ________ compared to ________ assets
A) bonds; financial B) bonds; real C) real estate; financial D) real estate; real
Which of the following is the most accurate statement about the effects of quality change on the CPI?
a. Even though the BLS adjusts the prices of products in the CPI basket when the quality of the products changes, changes in quality are still a problem because quality is so hard to measure. b. Because the BLS adjusts the prices of products in the CPI basket when the quality of the products changes, changes in quality are no longer a problem for the CPI. c. The BLS does not adjust the CPI for quality changes. d. Most economists believe that changes in the quality of goods included in the CPI basket do not bias the CPI as a measure of the cost of living.
What is the percentage of income received by the lower three quintiles on line J?
