Soft budget constraints is an idea of:
a. Mises
b. Schumpeter
c. Kornai
d. Keynes
e. Smith
C
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Goldsmiths who issued receipts for the customer deposits of gold or silver coins were probably the originators of
A) money. B) paper money. C) seignorage. D) Federal Reserve notes.
The experience of the United States and other industrialized countries in the 1930s contradicts the classical view of the labor market where the money wage adjusts quickly to maintain full employment. On this issue
a. the Keynesians agree but the monetarists disagree. b. the monetarists agree but the Keynesians do not agree. c. both the Keynesians and monetarists are in agreement. d. neither the Keynesians nor the monetarists agree.
The time-inconsistency problem is likely to arise in Cadmia if _____
a. attempts are made to coordinate monetary policy with fiscal policy b. there is a lag between the announcement of a monetary policy and its implementation c. policy makers initially aim to keep the price level stable but do not follow through as promised d. policy makers do not allow enough time for a new policy to take effect e. there is a deep conflict among monetary policy makers
The marginal factor cost of borrowing $1,000 for new equipment when the interest rate is 10 percent and the MRP is $700 is
a. $1,000 b. $700 c. $100 d. $70 e. $0 since the firm won't borrow $1,000 when the MRP is only $700