The reason that economists are so interested in the stability of velocity is because if the demand for money is not stable, then steady growth of the money supply
A) is going to promote price stability at the expense of low unemployment.
B) is going to promote low unemployment at the expense of price stability.
C) is an ineffective way to conduct monetary policy.
D) can still be used to conduct monetary policy if the goal is price stability.
C
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An individual consumes only two goods, X and Y. Which of the following expressions represents the utility maximizing market basket?
A) MRSxy is at a maximum. B) Px/Py = money income. C) MRSxy = money income. D) MRSxy = Px/Py. E) all of the above
We would expect that a fall in labor supply will have a proportionately larger effect on the market wage rate when
A) capital goods exist that can replace many of the workers. B) the product produced in the industry has several close substitutes. C) the product produced in the industry makes up a large portion of most families' budgets. D) labor represents a relatively small portion of total costs.
The free-rider problem
a. forces the supply of a public good to exceed its demand. b. results in common resources becoming club goods. c. explains why many local governments supply public goods. d. results in public goods becoming private goods.
One of the major insights by economist John Maynard Keynes about inventories and demand was that if planned inventories:
A. < actual inventories then demand was lower than anticipated. B. > actual inventories then demand was lower than anticipated. C. = actual inventories then demand was higher than anticipated. D. > actual inventories then demand was higher than anticipated.