For a theme park a two-tier tariff can include a positive admission price and a zero per-ride fee
What will be an ideal response?
True. Both fees do not have to be positive. The firm will choose the combination of fee and per-ride price that maximizes profits.
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Change in U.S. policy can lead to changes in inflationary expectations, interest rates, and exchange rates simultaneously as they all adjust to new equilibrium levels
Indicate whether the statement is true or false
Refer to Figure 12.3. Suppose the economy is initially at full employment with real GDP equal to potential GDP, and the Fed does not target interest rates, allowing the real interest rate to change like it did during the Great Depression. This would be reflected as a movement from ________ in the IS-MP model and ________ the Phillips curve.
A) point Y to point X; a movement up B) point X to point Y; a movement down C) point Z to point Y; a movement up D) point Y to point Z; a movement down