If policymakers are aggressive in keeping current inflation near the target inflation rate then the monetary policy reaction curve will:
A. be steep.
B. have an undefined slope.
C. be flat.
D. be vertical.
Answer: A
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An individual seller's producer surplus on a unit of a good is
a. zero in perfect competition b. zero in monopoly c. greater than the buyer's consumer surplus on that unit d. an example of a side payment e. the difference between the price the seller receives and the cost of producing that unit.
In the specificfactors model, migration of labor will cause:
a. the wage to rise in the receiving country and the wage to fall in the sending country. b. the wage to fall in the receiving country and the wage to rise in the sending country. c. the wage to rise in both the receiving and sending countries. d. the wage to fall in both the receiving and sending countries.
If production is characterized by increasing returns to scale, then
a) the economy is self-sufficient and will not engage in foreign trade b) intra-industry trade is likely to occur c) the nation is more likely to be a net importer than a net exporter d) the production possibilities set is limitless e) smaller production runs are more economical than large ones
The case for product differentiation does not include the fact that
A. products that satisfy a real demand survive. B. it wastes society's scarce resources. C. new products satisfy people with different preferences. D. standards of living rise with product innovation.