According to the real business cycle theory, ________ are responsible for economic growth.
A. expansionary fiscal and monetary policies
B. positive shifts in the AS curve
C. positive shifts in the AD curve
D. trade and income policies
Answer: B
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The Federal Reserve System's four monetary policy goals are
A) low government budget deficits, low current account deficits, high employment, and a high foreign exchange value of the dollar. B) a low rate of bank failures, high reserve ratios, price stability, and economic growth. C) price stability, high employment, economic growth, and stability of financial markets and institutions. D) price stability, low government budget deficits, low current account deficits, and a low rate of bank failures.
Assume Robbie's Robots operates in a perfectly competitive market producing 3,000 robots per day. At this output level, the selling price is $800 per robot and the marginal cost is $625 per robot. To maximize profits, Robbie's Robots should
A. make no adjustments as they are already maximizing their profits. B. increase their output. C. decrease their output. D. stop producing since it is earning a loss.
Why can exchange rates be very volatile?
What will be an ideal response?
If policymakers are concerned that the economy is in danger of rising inflation because aggregate demand is increasing faster than aggregate supply, the appropriate fiscal policy response is to
A) increase government spending. B) increase taxes. C) increase interest rates. D) use expansionary fiscal policy.