The quantity theory of money:
A) assumes that the ratio of money supply to nominal GDP decreases over time.
B) assumes that the ratio of money supply to nominal GDP increases over time.
C) is a representation of how a change in money supply affects the price level in an economy.
D) is an exact representation of how the economy behaves in the long-run.
C
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The assumed goal of the firms that operate in each of the four market structures discussed in the text is to maximize:
A) sales. B) revenue. C) profits. D) price.
Which of the following is not a weakness of fiscal policy as a tool of economic stabilization? a. It is ineffective in dealing with stagflation
b. Its correct implementation depends on an accurate estimate of potential output. c. It is subject to lags. d. It affects only aggregate demand but does not have any impact on aggregate supply. e. Households may not respond to changes they perceive as permanent.
If those who consumed common resources were subject to a tax that was equal to the external costs that they imposed due to the negative externality created:
A. an efficient level would be reached. B. total surplus would be maximized for the whole society. C. individuals would consume less. D. All of these statements are true.
Jen has a PhD in economics and has been working for 3 years part-time as an instructor; she has always hoped to be hired as a full-time faculty member. The best way to describe Jen is to say she is:
A. a discouraged worker. B. unemployed. C. underemployed. D. overemployed.