Evidence from the time period 1960-1980 indicates that inflation in the United States resulted from
A) an employment target that was set too high.
B) the government's inability to sell bonds to the Fed.
C) an expansion in the money supply to finance federal government expenditures.
D) the excessive sale of government bonds to the public.
A
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A new Mexican restaurant opened in the town of Manchester. The residents of the town are
a. happy because of the product-variety externality, while other restaurant owners are unhappy because of the business-stealing externality. b. happy because of the business-stealing externality, while other restaurant owners are unhappy because of the product-variety externality. c. unhappy because of the product-variety externality, while other restaurant owners are happy because of the business-stealing externality. d. unhappy because of the business-stealing externality, while other restaurant owners are happy because of the product-variety externality.
Comparative advantage is the ability to
A) perform an activity at a lower opportunity cost. B) determine who your best trading partners are. C) determine the best use of capital goods. D) convince others of the best choices to make in their own self-interest.
In prosperous times, commercial banks are likely to hold very small amounts of excess reserves because:
A. the Fed forces commercial banks to increase the money supply during economic expansions. B. it is very costly to transfer funds between commercial banks and the central banks. C. Federal Reserve Banks pay lower rates of interest on bank reserves than could be earned by the commercial banks loaning out the reserves. D. Federal Reserve Banks want to minimize their interest payments on such deposits.
The demand for nominal money
A) increases as the price level increases. B) decreases as the price level increases. C) depends on the quantity of money. D) is the same as the demand for real money.