Economist Alban William Phillips believed that:
a. the Fed should follow a policy rule because it does not know the lag structure.
b. the Fed should follow a policy rule to avoid monetary surprises
c. there is an inverse relationship between inflation and unemployment.
d. private sector spending is inherently unstable.
e. government spending is inherently unstable.
c
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Everything else held constant, if the sum of the required reserve ratio and the excess reserve ratio is less than one, a decrease in the currency-deposit ratio causes the M1 money multiplier to ________ and the money supply to ________
A) decrease; increase B) increase; increase C) decrease; decrease D) increase; decrease
A monopolist earns only normal profits in the long run
a. True b. False Indicate whether the statement is true or false
Money evolved out of the self-interested actions of
A) economists. B) governments. C) a few kings and queens. D) individuals.
A pure monopolist sells output for $4.00 per unit at the current level of production. At this level of output, the marginal cost is $3.00, average variable costs are $3.75, and average total costs are $4.25. The marginal revenue is $3.00. What is the
short-run condition for the monopolist and what output changes would you recommend? What will be an ideal response?