When policy makers are constantly shifting back and forth between expansionary and restrictive monetary policy, this is most likely to
A) keep the general level of prices relatively stable because the periods of restrictive policy will just offset the periods of expansion.
B) help promote economic stability because changes in monetary policy can be counted on to exert a predictable impact on the economy quickly.
C) promote economic stability and stimulate employment.
D) promote instability because the time lags of monetary policy are long and unpredictable.
D) promote instability because the time lags of monetary policy are long and unpredictable.
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The risk that a borrower has more information about their previous behavior than a potential lender is known as the ________
A) moral hazard problem B) adverse selection problem C) time-space discontinuity D) tertiary behavior problem
At an output level of 100, a monopolist faces MC = 15 and MR = 17. At output level q = 101, the monopolist's MC = 16 and MR = 15. To maximize profits, the firm
A) should produce 100 units. B) should produce 101 units. C) cannot maximize profits. D) is not a monopoly.
Carmen listens to opera music every evening when she gets home from work. Carmen loves listening to opera, but her neighbor Paul, who can also hear the music, hates it. If Paul is the only person besides Carmen who can hear the music, then Carmen's music generates:
A. neither a positive nor a negative externality. B. a positive externality. C. a negative externality. D. both a positive and a negative externality.
The Federal Open Market Committee oversees the buying and selling of:
a) government securities. b) foreign currencies. c) imports. d) corporate debt.