According to the misperceptions theory, if the Fed wanted to use monetary policy to influence the real economy it would have to
A) increase the money supply whenever the economy was in a recession.
B) decrease the money supply whenever the economy was in an inflationary boom.
C) surprise the public with unexpected changes in monetary policy.
D) abide by the monetary targets it announced.
C
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Attractive landscaping increases the property values of surrounding homes, creating a marginal benefit. The figure above represents the market for monthly landscaping contracts
a) What is the marginal social benefit of the 40th contract? Of the 60th contract? b) What is the marginal private benefit of the 40th contract? c) What is the marginal external benefit of the 40th contract? d) What is the unregulated competitive equilibrium price and quantity? e) What is the efficient quantity? f) What is the amount of the deadweight loss?
The actual rate of inflation is equal to the expected rate of inflation along the:
a. downward-sloping Phillips curve. b. upward-sloping aggregate supply curve. c. horizontal aggregate supply curve. d. downward-sloping aggregate demand curve. e. vertical Phillips curve.
Assume that an oligopolist faces a kinked demand curve. Suppose that the marginal cost curve passes through the gap in the marginal revenue curve. Price and output will be determined
a. drawing a line from the point where MC = P to both the vertical and horizontal axis, the vertical indicating output, the horizontal indicating price b. drawing a line from the point where MC = P to both the vertical and horizontal axis, the vertical indicating price, the horizontal indicating output c. at the kink d. at ATC = MC which, too, passes through the gap e. to be zero because the MC curve passes through the gap
Which of the following possible points on a labor supply curve is consistent with the income-leisure tradeoff graph below? 
A. Wage = 2: Hours worked = 10 B. Wage = 3: Hours worked = 14 C. Wage = 1: Hours worked = 12 D. All of these are consistent with the information on the graph