Which of the following is a statement with positive economic analysis?
A) Lower wages increase employment and reduce the unemployment rate.
B) Slower money growth reduces inflation.
C) A reduction in the size of the budget deficit will reduce interest rates.
D) all of the above
D
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For this question, assume that the Fed is expected to respond to any event by keeping output constant (i.e., equal to its initial level). An unexpected increase in government spending will cause
A) stock prices to fall. B) stock prices to rise. C) no change in stock prices. D) an ambiguous effect on stock prices.
Which of the following statements is true?
A) Productive inefficiency implies that it is possible to produce more of one good and no less of another, but only if additional resources are made available. B) Productive efficiency implies that it is possible to produce more of one good and no less of another, even without additional resources. C) Productive inefficiency implies that it is impossible to produce more of one good and no less of another. D) Productive inefficiency implies that it is possible to produce more of one good and no less of another, even without additional resources.