Before the financial crisis of 2007, inflation was on the rise. According to the MP curve, this would lead to ________
A) an increase in the real interest rate
B) an upward shift of the MP curve, if policymakers opted for autonomous tightening
C) a decrease in aggregate output
D) all of the above
E) none of the above
D
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Which of the following is a difference between an oligopoly with differentiated products and a monopolistic competition?
A) There are no barriers to entry in an oligopoly with differentiated products, while there are huge barriers to entry in a monopolistic competition. B) There are huge barriers to entry in an oligopoly with differentiated products, while there are minimal barriers to entry in a monopolistically competitive market. C) Firms in an oligopoly market with differentiated products charge a price higher than marginal cost in the long run, while firms in a monopolistic competition charge a price lower than marginal cost in the long run. D) Firms in an oligopoly with differentiated products charge a price lower than average total cost in the long run, while firms in a monopolistic competition earn a price higher than average total cost in the long run.
A central cause of the rising debt-GDP ratio in the United States during the 1980s and 1990s was
A) the tax cuts of the early 1980s. B) continuous increases in the military portion of the federal budget. C) overly-generous indexation of Social Security benefits. D) deficit-reduction targets.