If expectations are formed rationally, wages and prices are not completely flexible in the short run, and policy is correctly anticipated, increases in aggregate demand will stimulate the economy to higher levels of Real GDP and lower levels of unemployment in
A) the short run or the long run.
B) neither the short run nor the long run.
C) the short run, but not in the long run.
D) the long run, but in not the short run.
C
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To maximize its profits, a monopoly should produce the quantity where its marginal cost equals its:
a. average total cost. b. average variable cost. c. demand. d. marginal revenue.
Assume that the central bank increases the reserve requirement. If the nation has highly mobile international capital markets and a flexible exchange rate system, what happens to the quantity of real loanable funds per time period and net nonreserve-related international borrowing/lending in the context of the Three-Sector-Model?
a. The quantity of real loanable funds per time period rises, and net nonreserve-related international borrowing/lending becomes more negative (or less positive). b. The quantity of real loanable funds per time period falls, and net nonreserve-related international borrowing/lending becomes more negative (or less positive). c. There is not enough information to determine what happens to these two macroeconomic variables. d. The quantity of real loanable funds per time period and net nonreserve-related international borrowing/lending remain the same. e. The quantity of real loanable funds per time period falls, and net nonreserve-related international borrowing/lending becomes more positive (or less negative).