A reason that the quantity theory of money has lost favor is that:
A. the federal funds market has been taken over by the Federal Reserve bank.
B. the economy recently experienced an unexpected and deep recession.
C. the quantity of money is better at predicting stock prices.
D. money growth and inflation are no longer closely related.
Answer: D
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Use the following graphs to answer the next question.
In the diagrams, AD1 and AS1 are the "before" curves. Assuming Q1 is full-employment output, a recession is depicted by ________.
A. panel (A) only B. panel (B) only C. panel (C) only D. panels (A) and (B)
A decrease in taxes will shift aggregate demand to the _____, cause consumption to _____, and cause output to _____. Due to the crowding-out effect, investment will _____
Fill in the blank(s) with correct word
All else equal, if Canada raises its interest rates,
A) the dollar depreciates. B) the U.S. demand for Canadian dollars decreases. C) the Canadian supply of Canadian dollars increases. D) the Canadian dollar will depreciate.
Monopolistically competitive firms use a(n) ________ strategy to achieve market power.
A. opportunistic behavior B. dominant C. maximin D. product differentiation