If interest rates and output rises, then
a. government spending may have fallen.
b. the money supply may have risen.
c. taxes may have risen.
d. expectations may have risen.
e. none of the above.
D
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Those who accept both the rational expectations hypothesis and the assumption of flexibility of wages and price would likely argue that
A) if policy makers are willing to accept a high inflation rate, they can reduce unemployment to a point below the natural rate. B) policy makers can eliminate fluctuations in the level of business activity with careful planning of a widely publicized monetary policy. C) saving and investment do not contribute to economic growth. D) active policy making does not contribute to economic stability.
Refer to Figure 2-2. Suppose Mendonca is currently producing 60 pounds of vegetables per period. How much meat is it also producing, assuming that resources are fully utilized?
A) 45 pounds of meat B) 75 pounds of meat C) 80 pounds of meat D) 100 pounds of meat
A Roth IRA differs from a traditional IRA in that
A. the Roth IRA allows for savings towards retirement. B. the Roth IRA is phased out at certain income levels. C. the Roth IRA is not tax deductible at the time it is deposited. D. all of these answer options are correct.
Suppose the price of movies seen at a theater rises from $12 per couple to $20 per couple. The theater manager observes that the rise in price causes attendance at a given movie to fall from 300 persons to 200 persons
What is the arc price elasticity of demand for movies? A) 0.5 B) 0.8 C) 1.0 D) 1.2