The Fed lowered interest rates in 2001 and 2002 . This implies, other things the same, that the Fed
a. increased the money supply because it was concerned about unemployment.
b. increased the money supply because it was concerned about inflation.
c. decreased the money supply because it was concerned about unemployment.
d. decreased the money supply because it was concerned about inflation.
a
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If firms and workers have adaptive expectations, what impact will expansionary monetary policy have on inflation, unemployment, and the Phillips curve?
What will be an ideal response?
When factor markets are competitive, it always pays a profit-maximizing firm to
a. use more of the factor. b. bid very low prices for inputs. c. reduce the use of all inputs. d. use that quantity of input that makes MRP equal to the price of the input.
You are trying to design a tax system that will simultaneously achieve both of the following goals: 1) two people with the same total income would pay taxes of the same amount, and 2) a high-income person would pay a higher fraction of income in taxes than a low-income person. Which of the following tax systems could achieve both goals?
a. a lump-sum tax b. a regressive tax c. a progressive tax d. a proportional tax
Suppose that your neighbor plays a stereo very loudly, which keeps you from sleeping. This common property problem can be solved through voluntary exchange as long as?