If the CPI falls from 142 to 140 between two consecutive years, this implies that prices fell by 2% between those two years
Indicate whether the statement is true or false
FALSE
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Friedman and Schwarz argue that money is not neutral because
A) theoretical models of the economy don't show monetary neutrality. B) money is a leading, procyclical variable. C) they found several historical incidents in which changes in the money supply were not responses to macroeconomic conditions, and output moved in the same direction as money. D) they found no evidence that productivity changes or changes in government spending contributed to business cycles; only monetary changes preceded every recession.
Economists make assumptions to
a. mimic the methodologies employed by other scientists. b. minimize the number of experiments that yield no useful data. c. minimize the likelihood that some aspect of the problem at hand is being overlooked. d. focus their thinking on the essence of the problem at hand.
An example of a government organization involved primarily in public regulation or industrial regulation of natural monopolies would be the:
A. Food and Drug Administration B. Environmental Protection Agency C. Federal Energy Regulatory Commission D. Occupational Safety and Health Administration
Which of the following best explains why the elasticity of supply of labor for an individual with a Cobb-Douglas utility function (for consumption and leisure) is zero?
a. Income and substitution effects are precisely offsetting. b. The elasticity of substitution of leisure for consumption is zero. c. Leisure is an inferior good. d. Consumption is subject to diminishing marginal utility.