The interest rate effect implies that
A. the short-run aggregate supply curve is vertical.
B. the aggregate demand curve has a positive slope.
C. the short-run aggregate supply curve is horizontal.
D. the aggregate demand curve has a negative slope.
Answer: D
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What role can the government play in correcting problems of imperfect information?
What will be an ideal response?
Which of the following measures gives the earliest warning of increasing inflation?
A) the Consumer Price Index B) the Producer Price Index C) the Personal Consumption Expenditure Index D) All of these should signal the same short-run inflation.
Compared to a sampling of other developed nations, the U.S. income distribution is more unequal than many others. What accounts for this?
A) The lowest-income families in the United States earn much less than the lowest-income households in other nations. B) Marginal income tax rates are much higher in the United States than in any other nation. C) The highest-income families in the United States earn much more than the highest-income households in other nations. D) Other nations manipulate their data to look better.
A firm can take advantage of economies of scale through
A. Investment decisions to increase capacity. B. A production decision to increase output. C. Investment decisions to reduce capacity. D. A production decision to increase capacity.