Which of the following situations is one in which the Fed will potentially pursue expansionary monetary policy?
A) Aggregate demand is growing too fast to keep the economy at full employment.
B) Potential GDP is forecasted to be lower than equilibrium GDP.
C) Potential GDP is forecasted to be higher than equilibrium GDP.
D) Aggregate demand is growing too slowly and the economy is in danger of producing GDP above full employment.
C
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Cost minimization is the process of making optimal use of all of the inputs whose quantities are
a. set in the short run. b. set in the intermediate run. c. set in the long run. d. variable in the short and long run.
To maximize its profit, a monopolistically competitive firm
a. takes the price as given and chooses its quantity, just as a competitive firm does. b. takes the price as given and chooses its quantity, just as a colluding oligopolist does. c. chooses its quantity and price, just as a competitive firm does. d. chooses its quantity and price, just as a monopoly does.