When the nominal exchange changes from 110 yen per dollar to 120 yen per dollar, the dollar has:
A. depreciated.
B. become overvalued.
C. become undervalued.
D. appreciated.
Answer: D
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The time inconsistency of policy implies that
a. what policymakers say they will do is generally what they will do, but people don't believe them because of current policy. b. when people expect that inflation will be low, it is harder for the Fed to increase output by increasing the money supply. c. people will believe Fed policy will be more inflationary than the Fed claims. d. what policymakers say they will do is usually not what they do, but people believe them anyway.
In the Keynesian model, a $1 billion increase in autonomous consumption leads to ________ in short-run equilibrium output.
A. a $1 billion increase B. no change C. a $1 billion decrease D. a greater than $1 billion increase
The economic model of consumer behavior predicts that
A) consumers will try to earn as much income as they can over their lifetimes. B) consumers will choose to buy the combination of goods and services that make them as well off as possible from those combinations that their budgets allow them to buy. C) consumers will try to accumulate as many goods and services as they can before they die. D) consumers divide their time between consumption and leisure activities in order to maximize social welfare.
Economic profit is
A. P(q-ATC). B. Pq/ATC. C. (P?ATC)q. D. (P+ATC)q.