Workers and firms both expect that prices will be 2.5% higher next year than they are this year. As a result,
A) aggregate demand will increase by 2.5%.
B) the purchasing power of wages will rise if wages increase by 2.5%.
C) workers will be willing to take lower wages next year, but not lower than a 2.5 percent decrease.
D) the short-run aggregate supply curve will shift to the left as wages increase.
D
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What are fiscal and monetary policies? Do they have an immediate effect on the AD curve or the SAS curve?
What will be an ideal response?
What replaced the Bretton Woods system?
a. the gold standard b. a pooled currency system c. a free float system d. a managed float system e. fixed exchange rates
The "dual mandate" refers to the:
A. twin responsibilities of the Federal Reserve, to use monetary policy to ensure price stability and maintain full employment. B. orders given to both the Federal Reserve and the Treasury department to ensure price stability. C. responsibility given to the Federal Reserve and the Congress to conduct monetary and fiscal policy respectively, to ensure price stability. D. role that the Fed has by being a governmental agency but also must act in the best interest of all citizens of the United States.
If a profit-maximizing restaurant is going to increase its revenues by charging senior citizens (persons age 65 and over) lower prices than other customers,
a. the demand of senior citizens for the services of the restaurant must be inelastic. b. senior citizens must have lower incomes than other potential customers. c. the demand of senior citizens for the services of the restaurant must be elastic. d. senior citizens must have higher incomes than other potential customers. e. other customers must enjoy food more than senior citizens.