According to monetarists, changes in velocity can
A) lower GDP
B) raise GDP
C) shift the SRAS, but not the LRAS
D) a and b
E) a, b and c
D
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Provisions that cause changes in government spending and taxes that do not require action of the President or Congress are called
A) discretionary fiscal policy. B) automatic stabilizers. C) private stabilization effects. D) discretionary stabilizers.
Refer to the figure above. If a per-unit tax of $1.50 is imposed on the sale of Good X, what is the size of the deadweight loss due to taxation?
A) $5 million B) $7.5 million C) $1.5 million D) $2 million
When two goods are perfect substitutes, their indifference curves are straight lines
Indicate whether the statement is true or false
Joseph has the utility function U(F,H) = 10F2H, where F is the quantity of food he consumes per year and H is the quantity of housing per week. Suppose the price of food is $10 and the price of housing is $5, while Joseph has an income of $150/week
a. Calculate Joseph's MRS as a function of the quantities F and H. b. Write out Joseph's constrained optimization problem with the information provide d. c. Using the substitution method, solve for Joseph's optimal consumption bundle of food and housing. d. Show that at the optimum, Joseph consumes the bundle along the budget constraint where MRS = MRT.