The short run sequence of events following an unanticipated shift to a more restrictive monetary policy would be
a. lower interest rates, decrease in aggregate demand, and a reduction in output.
b. lower interest rates, increase in aggregate demand, and an expansion in output.
c. higher interest rates, decrease in aggregate demand, and a reduction in output.
d. higher interest rates, increase in aggregate demand, and an expansion in output.
C
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Which of the following does not describe a characteristic of short-term economic fluctuations?
A. Expansions and recessions are felt in only a few sectors of the economy. B. The unemployment rate rises during recessions. C. Durable-goods industries are more sensitive to short-term fluctuations than service and non-durable industries. D. Expansions and recessions are irregular in length and severity.
In return for their services in the primary securities market, investment banks earn a fee called a(n)
A) underwriting spread. B) bid-asked spread. C) dealer's spread. D) broker's spread.
Use the figure below to answer the following question.
If a price floor in this market is set at P1, then
A. deadweight loss equals area h. B. no deadweight loss occurs. C. deadweight loss equals area d. D. more information is needed to find deadweight loss.
If the hourly wage of U.S. workers is $16, the hourly wage of Mexican workers is $2, and U.S. workers produce 9 times as much output per hour as Mexican workers, then, all else equal, it would be efficient to locate production facilities in:
A. Mexico since the cost per unit of output will be higher. B. the United States since the cost per unit of output will be lower. C. Mexico since the cost per unit of output will be lower. D. the United States since the cost per unit of output will be higher.