Starting from an initial long-run equilibrium, under the rational expectations hypothesis, an anticipated shift to a more expansionary policy will increase:
a. prices but not real output in the short run.
b. real output but not prices in the short run.
c. real output in the long run but not in the short run.
d. real output in both the long run and the short run.
a
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All of the following actions were taken by the Thai government to help Thailand maintain its peg against the dollar in the 1990s except
A) imposing restrictions on exports to the United States to prevent too many dollars from entering the economy. B) borrowing dollars from the International Monetary Fund in exchange for baht. C) increasing domestic interest rates to attract more foreign investors. D) buying baht on the foreign exchange market to support higher demand for the baht.
An oligopolistic market
a. has a small number of rival firms, and each is large relative to the size of the market. b. is characterized by firms that merely take the price that is determined by the forces of supply and demand in the market. c. has low entry barriers facing firms that may be interested in entering the market. d. has a large number of firms that are small relative to the size of the market.