Monetary neutrality refers to the fact that changes in the money supply
A) affect output more in the long run than in the short run.
B) have no effect on output in the long run.
C) affect only output in the long run.
D) have a greater effect on prices in the short run than in the long run.
B
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An increase in supply will cause equilibrium price to __________ and equilibrium quantity to __________
a. increase; increase b. increase; decrease c. decrease; increase d. decrease; decrease e. remain constant; increase
Which of the following is true in the short run at the output level where average total cost is at its minimum?
a. Marginal cost equals average total cost. b. Average variable cost equals fixed cost. c. Marginal cost equals average variable cost. d. Average total cost equals average fixed cost. e. Average total cost equals average variable cost.
The demand for money will be high in an economy experiencing: a. a depression
b. hyperinflation. c. deflation. d. a recession. e. a sluggish population growth.
The self-correcting property of the economy means that output gaps are eventually eliminated by:
A. increasing or decreasing potential output. B. government policy. C. decreasing inflation only. D. increasing or decreasing inflation.