Classical economist David Hume observed that as the money supply expanded after gold discoveries it took some time for prices to rise and in the meantime the economy enjoyed higher employment and production. This is inconsistent with monetary neutrality because
a. monetary neutrality would mean that neither prices nor production should have risen.
b. monetary neutrality would mean that production should have risen, but prices should not have.
c. monetary neutrality would mean the prices should have risen, but production should not have changed.
d. monetary neutrality would mean that prices and production should both have fallen.
c
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In the figure above, the demand is elastic in the range of prices between
A) $3.50 and $4.50 per cup B) $2.50 and $3.50 per cup C) $1.00 and $2.00 per cup D) $2.00 and $4.00 per cup E) $1.75 and $2.75 per cup
Firms that contain some divisions that produce parts and components to be used by other divisions in order to generate finished goods are said to be:
A) horizontally integrated. B) vertically integrated. C) multinationals. D) corporations.
Refer to the graph shown. If the supply curve shifts from S1 to S2, the value of the dollar will:
A. decrease in response to excess supply equal to Q3 - Q1. B. increase in response to excess demand equal to Q4 - Q2. C. decrease in response to excess supply equal to Q4 - Q2. D. increase in response to excess demand equal to Q3 - Q1.
Marginal cost begins to rise when
A. diminishing marginal product ends. B. average total cost falls. C. fixed cost falls. D. diminishing marginal product begins.