What is the monetarist prescription for the reducing unemployment, and why?
What will be an ideal response?
Monetarists favor steady and predictable growth of the money supply. This allows people to think about real production decisions instead of worrying about changes in the money supply. According to monetarists, expansionary policies will not change the level of output but will cause inflation because AS is vertical at the natural rate of unemployment.
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Explain why economics is a science and how it differs from a physical science.
What will be an ideal response?
Banks subject to reserve requirements set by the Federal Reserve System include
A) only nationally chartered banks. B) only banks with assets less than $100 million. C) only banks with assets less than $500 million. D) all banks whether or not they are members of the Federal Reserve System.
A front-page story in the New York Times carries the headline "War on Drugs Continues: 200 More Arrested.". On the editorial page, an opinion piece on the subject is titled "Do We Really Need the War on Drugs?" The opinion piece is more likely than the front-page story to
a. have macroeconomic content b. be fact-finding c. contain normative statements d. contain positive statements e. be less a matter of debate
One way to allocate 1,000 (stadium capacity) football tickets priced at $20 to 2,000 would-be buyers is to
a. put the tickets on sale for half price b. increase market efficiency c. make the tickets available to more people at the low price d. use a price ceiling to ensure that the market will remain in equilibrium e. implement a ration coupon system