If Real GDP increases at an annual rate of 3 percent and velocity increases at a rate of 2 percent per year, then rules-based monetary policy advocates who wish to maintain a stable price level would set the annual money supply growth rate at
A) -2 percent.
B) 0 percent.
C) 1 percent.
D) 6 percent.
E) -1 percent.
C
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If the marginal social cost of a good is $70 and the marginal external cost is $20, what does the marginal private cost equal?
What will be an ideal response?
Under conditions of perfect competition, if any one buyer increases her purchases, the market price
a. rises b. remains unchanged c. falls d. either rises or falls e. will change, but in an unpredictable fashion
The stock of wealth increases more rapidly the faster the flow of ________.
A. assets B. money C. saving D. income
Suppose that the economy is currently below its long-run equilibrium output. Which of the following is an example of monetary policy that can help put the economy back toward equilibrium?
A) Increasing the money supply to reduce interest rates to encourage more spending and investment. B) Raising income taxes to help pay off government debt. C) Reducing the money supply to push interest rates higher to encourage more savings. D) Decreasing income taxes to encourage more spending and investment.