Survey data suggest that most firms
a) respond to increased demand by utilizing overtime
b) respond to increased demand by sub-contracting work to other firms
c) review their pricing policies either daily or weekly
d) change the prices of output monthly
e) adjust wages and output prices with equal frequency
a) respond to increased demand by utilizing overtime
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Although monopoly and perfect competition result in different market outcomes, the fact that firms in both market structures work to maximize their profits ensures that resources are allocated efficiently in both situations
Indicate whether the statement is true or false
A decline in the output gap causes the demand for real balances
A) to rise and the interest rate to fall. B) to fall and the interest rate to rise. C) and the interest rate to fall. D) and the interest rate to rise.
The zero-lower-bound problem eliminates the ability of the central bank to use which of the following in implementing policy?
A) open market operations B) discount lending C) the federal funds rate D) the required reserve ratio
When the foreign price level falls, domestic goods become more expensive relative to foreign goods, causing domestic net exports and aggregate demand to fall
a. True b. False Indicate whether the statement is true or false