According to the assignment rule, which of the following policy mixes is appropriate for a country with high inflation, a balance of payments deficit, and fixed exchange rates?
A. Contractionary fiscal policy and contractionary monetary policy
B. Expansionary fiscal policy and contractionary monetary policy
C. Contractionary fiscal policy and expansionary monetary policy
D. Expansionary fiscal policy and expansionary monetary policy
Answer: A
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If real GDP is greater than planned aggregate spending:
A. real GDP will fall. B. unplanned inventory investment is negative. C. real GDP will rise. D. the economy is in equilibrium.
In order to differentiate their product brands from those of competing firms, monopolistically competitive firms
A) equate marginal cost to marginal revenue to determine the profit maximizing quantity. B) spread false rumors about their competitors. C) take their competitor's reactions to changes in their policies into account. D) advertise their product.