A Core Belief of Modern Macroeconomics Is That in the Short

question 47

Multiple Choice

A core belief of modern macroeconomics is that in the short run,

• A)fiscal policy is more effective in changing output than monetary policy.
• B)monetary policy is more effective in changing output than fiscal policy.
• C)fluctuations in aggregate demand affect unemployment.
• D)fluctuations in aggregate demand have no impact on the price level.
• E) the economy always operates at or near the natural rate of unemployment.

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Definitions:

Dollars Per Unit

A unit cost measure representing the price or cost of a single item or measure of goods or services.

Elasticity of Product Demand

A measure of the responsiveness of the quantity demanded of a product to changes in its price.

Elasticity of Resource Demand

The measure of how much the quantity demanded of a resource changes in response to a change in its price.

MRP

Marginal Revenue Product, which is the additional revenue generated from employing one more unit of a resource.