According to classical economists, Say's law applies to a barter economy, but it does not apply to a money economy
Indicate whether the statement is true or false
False
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The Federal Reserve can:
A. only set a money supply target that is consistent with a nominal interest rate target, and vice versa. B. only target the nominal interest rate, not the money supply. C. simultaneously set independent money supply and nominal interest rate targets. D. only target the money supply, not the nominal interest rate.
Assume that emissions from electric utilities contribute to pollution in the form of acid rain. Which of the following describes how this affects the market for electricity?
A) The equilibrium in the market is not efficient; consumer surplus is equal to producer surplus. B) The equilibrium in the market is not efficient; because of the cost of the acid rain, economic efficiency would be greater if more electricity were produced. C) A deadweight loss occurs; at equilibrium the additional social cost of production is greater than the additional benefit to consumers. D) The equilibrium in the market is not efficient; the marginal benefit from electricity is greater than the marginal social cost.
Does the signalling effect of foreign exchange intervention support or refute the claim that assets cannot be perfect substitutes if sterilized intervention is going to have any effect? Please explain
What will be an ideal response?
Foreign aid:
A. provided by developed countries to developing countries represents about 10 percent of the GDP of developed countries. B. is an important source of funding for investment in most developing countries. C. does not contribute much to domestic investment in most developing countries. D. is largely wasted in most developing countries because it comes with no strings attached.