The Austrian view of the business cycle stresses that
a. expansionary monetary policy will stimulate aggregate demand and thereby promote lengthy economic expansions.
b. the velocity of money is constant and therefore an increase in the quantity of money will lead only to a proportional increase in the general level of prices.
c. expansionary monetary policy will lead to higher interest rates that will retard investment and throw the economy into a recession.
d. the interest rate is one of the most important prices and manipulation of the interest rate by monetary policy-makers is a major source of economic instability.
D
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Refer to Scenario 14.1. Marco and Lisette decide to help each other out and agree to split any medical bills from their doctor. With this new arrangement, Marco's dominant strategy will give him a net benefit of
A) $45. B) $75. C) $120. D) $150.
Social Security, like other governmental programs, alters individuals' decisions to save, consume and invest privately for the present as well as the future
Indicate whether the statement is true or false
Suppose Winston's annual salary as an accountant is $60,000, and his financial assets generate $4,000 per year in interest. One day, after deciding to be his own boss, he quits his job and uses his financial assets to establish a consulting business, which he runs out of his home. To run the business, he outlays $8,000 in cash to cover all the costs involved with running the business, and earns revenues of $150,000. What are Winston's economic profits?
A. $138,000 B. $78,000 C. $150,000 D. $142,000
One cost of unanticipated inflation is:
A. both lenders and borrowers lose. B. arbitrary redistributions of income. C. nominal income falls below real income. D. people cannot repay their debts.