To implement the Friedman rule for long-term monetary policy, the monetary authority would need to set the
A) inflation rate equal to zero.
B) nominal rate of interest equal to zero.
C) real rate of interest equal to zero.
D) money growth rate equal to zero.
B
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P = MC is a recipe for financial loss in an innovative firm established by an innovative entrepreneur. Explain.
What will be an ideal response?
Under monopolistic competition, new firms are barred from entering the industry in the long run.
Answer the following statement true (T) or false (F)
If reckless drivers are more likely to buy automobile insurance than safe drivers are,
A) a moral hazard has occurred. B) adverse selection has occurred. C) the market for insurance is efficient. D) then automobile insurance will be fairly priced.
According to the above table, if the wage rate is $400 a week and the price of the good produced is $5, the perfectly competitive firm should hire
A) 3 workers. B) 4 workers. C) 5 workers. D) 6 workers.