Supply shocks after 1985
A) forced the Fed to follow restrictive monetary policy and caused a negative output ratio.
B) forced the Fed to follow restrictive monetary policy and caused a positive output ratio.
C) allowed the Fed to follow accommodative monetary policy and caused a negative output ratio.
D) allowed the Fed to follow accommodative monetary policy and push the output ratio toward zero.
D
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The above figure shows the supply and demand curves for rice in the U.S. and Japan. Assume there is no trade between the two countries. If bad weather causes the supply curves in each country to shift leftward by the same amount, then
A) the price will increase in both countries. B) the price will decrease in both countries. C) the change in price cannot be determined. D) None of the above.
For any competitive labor market, what change would have to occur to cause the labor supply to decrease and shift the supply curve left?
A. Opportunity cost of work increases B. None of these statements is true. C. Number of workers increases D. Number of firms increases
A price-setting firm faces the following estimated demand and average variable cost functions:Qd = 800,000 - 2,000P + 0.7M + 4,000PRAVC = 500 - 0.03Q + 0.000001Q2where Qd is the quantity demanded, P is price, M is income, and PR is the price of a related good. The firm expects income to be $40,000 and PR to be $53. Total fixed cost is $2,600,000. What is the estimated marginal revenue function for the firm?
A. MR = 520 - 0.001Q B. MR = 1,600 - 0.004Q C. MR = 800 - 0.002Q D. MR = 800 - 0.004Q
Which of the following often involves positive external benefits?
A. water pollution B. drunken driving C. tobacco smoking D. inoculation programs