The monetarist-Keynesian debate on the importance of monetary policy is unresolved because monetarists and Keynesians focus on two different types of evidence that generate conflicting conclusions. Monetarists tend to focus on
A) structural-model evidence, while Keynesians focus on reduced-form evidence.
B) reduced-form evidence, while Keynesians focus on structural-model evidence.
C) reduced-form evidence, while Keynesians focus on direct-model evidence.
D) structural-model evidence, while Keynesians focus on direct-model evidence.
B
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Suppose that you have received $300 as a birthday gift. You can spend it today or you can put the money in a bank account for a year and earn 5 percent interest. The opportunity cost of spending the money today, in terms of what you could have after one year, is
a. $0. b. $15. c. $305. d. $315.
According to the life-cycle theory of consumption, people tend to ________ during their main working years.
A. consume more than they earn B. save C. accumulate negative wealth D. dissave
How wages are determined is best described by
A. political and social forces (such as unions) only. B. economic factors only. C. government regulation only. D. economic factors, with strong influences by political and social forces (such as unions).
During recent elections, consumer groups in various states attempted to get the sales tax on all medicines and drugs removed. They argued that such a tax is "severely regressive." What is the economic interpretation of their statement?
a. The poor get ill more often than do the rich. b. The poor pay higher prices for medicine and drugs than do the rich. c. The poor pay a higher percentage of their income for medicine and drugs than do the rich. d. All consumers pay too much money for medicine and drugs. e. The sales tax discourages the poor from seeking medical treatment.