The policy irrelevance proposition states that
A) only relatively large expected changes in monetary policy impact the economy.
B) anticipated changes in monetary policy are ineffective in changing real GDP.
C) only statements from the White House have impact on the economy.
D) in the short run unanticipated changes in monetary policy are ineffective in changing real GDP.
B
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Menu costs ________
A) are the cost a firm bears when it changes its prices B) are one source of price stickiness because changing prices involves many hidden costs C) are one source of price stickiness because firms may not want to change their "menus" too often and risk alienating customers D) all of the above E) none of the above
Savers in the financial system make decisions about how to save their money by following the basic principles of:
A. asset valuation. B. cost benefit analysis. C. rate of return on investments. D. risk valuation.
Identify the correct statement
a. Aggregate demand alone determines equilibrium price and output. b. Aggregate supply alone determines equilibrium price and output. c. Aggregate demand and aggregate supply determine equilibrium price and output. d. Aggregate demand shows the positive relationship between price level and real GDP. e. Aggregate supply shows the negative relationship between price level and real GDP.
Carlson earns an income of $10,000 per month. Under the federal income tax system, the first $9,000 he earns is taxed at 10% and the remaining income is taxed at 20%. The tax owed by Carlson equals _____
a. $1,100 b. $2,000 c. $1,500 d. $3,000