Briefly describe monetarism and the monetary growth rule
What will be an ideal response?
Monetarism refers to the macroeconomic theories of Milton Friedman and his followers, particularly the idea that the quantity of money should be increased at a constant rate. The monetary growth rule is a rule adhered to by monetarists. It is a plan for increasing the quantity of money at a fixed rate that does not respond to changes in economic conditions.
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Draw an aggregate supply and aggregate demand graph which shows the economy producing an output which exceeds potential output in the short run, and the adjustment that will occur as the economy adjusts to long-run equilibrium
What will be an ideal response?
In the figure above, the deadweight loss created if the industry changes from perfectly competitive to a single-price, unregulated monopoly is
A) zero. B) $8.00 per day. C) $24.00 per day. D) $36.00 per day.
Which of the following statements regarding the Lorenz curve is FALSE?
A) A Lorenz curve is a geometric representation of the distribution of income. B) A Lorenz curve that is perfectly straight represents complete income equality. C) The less bowed is a Lorenz curve, the less equally income is distributed. D) The more bowed is a Lorenz curve, the more unequally income is distributed.
In 2008-2009, which of the following weakened the demand stimulus effects of expansionary fiscal policy?
a. the unwillingness of the federal government to run budget deficits b. the heavy indebtedness of American households c. a high level of household spending on big-ticket items such as houses and cars, which do not promote economic growth d. the continuation of the high saving rates on the part of Americans