In his 1967 address to the American Economic Association, Milton Friedman explained that increases in the money supply will temporarily reduce unemployment because:
a. wages do not respond to monetary policy.
b. unions support policies that increase inflation.
c. inflation benefits lenders.
d. prices rise faster than wages.
d. prices rise faster than wages.
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A monopolistically competitive firm has a
A. highly elastic demand curve. B. highly inelastic demand curve. C. perfectly elastic demand curve. D. perfectly inelastic demand curve.
What is the most common reason people demand money?
A) Each bill and coin is a reflection of important people and events in a nation's history. B) Since very few of us engage in a flow of transactions, money is our financial safety net. C) People desire to use money as a medium of exchange when they buy goods and services. D) They demand money to ensure that the nation's government will not spend too much.
In Keynes's view, an excess quantity of money supplied causes people to:
a. sell bonds and the interest rate rises. b. buy bonds and the interest rate falls. c. buy bonds and the interest rate rises. d. increase speculative balances.
The money supply known as M3
a. does not include credit union accounts b. excludes certificates of deposit c. includes M2 + large denomination time deposits and repurchase agreements d. excludes travelers' checks e. does not include demand deposits