Which of the following is a long-run adjustment?
a. A new economics professor is hired on campus.
b. General Motors increases its orders for steel.
c. Microsoft cuts back its hiring of new graduates.
d. Glow Electric disassembles one of its nuclear power plants.
e. Texaco buys more crude oil to refine into gasoline.
D
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If a small percentage decrease in the price of chocolate causes a larger percentage decrease in the quantity supplied, the
A) demand for chocolate is elastic. B) demand for chocolate is inelastic. C) supply of chocolate is elastic. D) supply of chocolate is inelastic.
Using the Taylor rule, if the current inflation rate equals the target inflation rate and real GDP is greater than potential GDP, then the federal funds target rate ________ the sum of the current inflation rate plus the real equilibrium federal
funds rate. A) will be the same as B) will be less than C) will be greater than D) may be greater than or less than