Given Keynesian assumptions about the shape of the aggregate supply curve and an economy suffering a recession, which of the following is most likely to occur if the Fed pursues expansionary monetary policy?
A. The equilibrium price level and output will both increase until full employment is reached.
B. The equilibrium price level and output will both decrease.
C. The equilibrium price level will increase but output will stay the same.
D. The equilibrium output will increase but the price level will stay the same until full employment is reached.
D. The equilibrium output will increase but the price level will stay the same until full employment is reached.
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Which of the following would tend to increase the wage of coal miners?
a. new environmental laws that make it more costly for firms to use coal in their production process b. an increase in the price of oil, a substitute for coal c. a decrease in the demand for coal d. an increase in the supply of coal miners
We would expect the cross elasticity of demand between Pepsi and Coke to be:
A. positive, indicating normal goods. B. positive, indicating inferior goods. C. positive, indicating substitute goods. D. negative, indicating substitute goods.