As a result of a kinked demand curve, the price:
A. fluctuates.
B. falls below the kink.
C. settles at the kink.
D. rises above the kink.
Answer: C
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Although the Fed professed employment of a monetary aggregate targeting strategy during the 1970s, its behavior suggests that it emphasized
A) free-reserve targeting. B) interest-rate targeting. C) a real-bills doctrine. D) price-index targeting.
What is an example of the scale effect?
A. Workers choose to provide more hours of labor when the wage rate decreases. B. The firm expands output when production costs increase. C. The firm hires more labor as long as the marginal product of labor is positive. D. The firm hires more labor when the wage falls because labor has become relatively cheaper compared to the price of other factors of production. E. The firm expands output when production costs fall.
Explain the special-interest effect
Please provide the best answer for the statement.
A currency pegged at a value below the market equilibrium exchange rate is
A) achieving purchasing power parity. B) undervalued. C) overvalued. D) None of the above are correct.