The emphasis by some economists on long-term outcomes is reminiscent of

Suppose a monopoly producer is also a monopsonist in the labor market. Demand for the output is p = 100 - Q. The production function is Q = L, and the labor supply curve is w = 10 + L. How much labor does the firm hire? What wage is paid?

What will be an ideal response?

If there is a leftward shift of the money demand curve, which of the following should the Fed do if it wants to keep the price level stable?

a. Lower its interest rate target b. Sell bonds in the open market c. Wait, since the price level does not usually change when the money demand curve shifts d. Raise its interest rate target e. Buy bonds in the open market