Decreases in the NAIRU represent a: A) leftward shift in the aggregate demand curve. B) leftward shift of the long-run aggregate supply curve. C) rightward shift of the long-run aggregate supply curve. D) rightward shift in the aggregate demand curve. ANSWER C
Date: September 10th, 2020
A decrease in efficiency would shift the long-run aggregate supply curve: A) rightward. B) leftward. C) no shift. D) none of the above. ANSWER B
Date: September 10th, 2020
If expectations of the future inflation rate are formed solely on the basis of a weighted average of past inflation rates, then economists would say that expectation formation is A) irrational. B) rational. C) adaptive. D) reasonable. ANSWER C
Date: September 10th, 2020
The actual unemployment rate exceeds the natural rate of unemployment. What are policymakers concerned about in this situation? What will be an ideal response? ANSWER If the actual unemployment rate exceeds the natural rate of unemployment, the economy is not operating near its full potential. Policymakers will want to stimulate spending thereby production and […]
Date: September 10th, 2020
The federal law that prohibits, among other things, price discrimination that lessens competition, the use of tie-in sales, and mergers between firms that reduce competition is the: A) Sherman Act of 1890. B) Clayton Act of 1914. C) Federal Trade Commission Act of 1914. D) Celler-Kefauver Act of 1950. ANSWER B
Date: September 10th, 2020
By analyzing aggregate demand through its component parts, we can conclude that, everything else held constant, a decline in the inflation rate causes A) an increase in real interest rates, an increase in investment spending, and a decline in aggregate output demand. B) a decline in real interest rates, a decrease in investment spending, and […]
Date: September 10th, 2020
If expectations are formed adaptively, then people A) use more information than just past data on a single variable to form their expectations of that variable. B) often change their expectations quickly when faced with new information. C) use only the information from past data on a single variable to form their expectations of that […]
Date: September 10th, 2020
Suppose that there is a positive aggregate demand shock and the central bank commits to an inflation rate target. If the commitment is credible, then A) the public’s expected inflation will remain unchanged. B) the short-run aggregate supply curve will not shift. C) over time inflation will fall back down to the inflation target. D) […]
Date: September 10th, 2020
The yield to maturity for a discount bond is ________ related to the current bond price. A) negatively B) positively C) not D) directly ANSWER A
Date: September 10th, 2020
What are the costs associated with inflation? What will be an ideal response? ANSWER Inflation can redistribute income between those who can raise their prices and wages and those who are unable to do so. Individuals on fixed incomes from pensions or investments will be worse off if these sources of income do not […]
Date: September 10th, 2020
