In the short run, the nominal interest rate is affected by changes in the money supply perceived to be temporary, but once ___ adjust(s), the nominal interest rate ___ in the long run.
a. the supply of money; rises
b. the price level; will revert to its former level
c. expectations of interest rates; falls
d. real GDP; does not change
Ans: b. the price level; will revert to its former level
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In the short run, the Federal Reserve can affect which of the following?
A) the growth rate of real GDP in the economy B) the inflation rate C) the unemployment rate D) all of the above
For which of the following goods is the marginal benefit of search likely to be greatest?
a. a haircut b. a maid c. a jar of peanut butter d. a heart bypass e. a new lamp
If economic losses exist in a monopolistically competitive market,
a. new products will be introduced. b. new firms will enter the market because they see potential for profit in the future. c. firms will exit the market and the existing firms' demand curves will shift to the left. d. the average total cost curve must lie below the demand curve. e. firms will exit the market and existing firms' demand curves will shift to the right.
In the short run, if average variable costs equal $45, average total costs equal $50, and output equals 100, the total fixed costs will equal
a. $5. b. $500. c. $1,000. d. $5,000.