The costs to firms of changing prices are called
A) menu costs. B) redistribution costs.
C) anticipation costs. D) money illusion costs.
Ques. 2________ consumption is consumption that does not depend upon the level of GDP.
A) Disposable B) Voluntary C) Induced D) Autonomous
Ques. 3The purchase of foreign stocks and bonds by a U.S. brokerage firm is an example of capital inflows to the United States.
Indicate whether the statement is true or false
Ques. 4Stagflation occurs when short-run aggregate supply decreases.
Indicate whether the statement is true or false
Ques. 5According to real business cycle models
A) the economy is normally operating below the natural rate of unemployment.
B) unexpected changes in monetary policy are the major source of fluctuations in real GDP.
C) the economy is normally at potential GDP.
D) the long-run Phillips curve is negatively sloped.
Ques. 6Which of the following is an appropriate discretionary fiscal policy if equilibrium real GDP falls below potential real GDP?
A) an increase in the supply of money B) an increase in individual income taxes
C) a decrease in transfer payments D) an increase in government purchases
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