Monetarists assume that there is a powerful direct link between aggregate demand and
A) velocity.
B) real money balances.
C) wage rates.
D) interest rates.
B
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Which of the following increases the supply of a good?
A) Prices of inputs used to produce the good rise. B) Productivity improves. C) Producers expect higher prices for the good in the future. D) There is a decrease in the price of a complement in production. E) The number of producers decreases.
Explain the differences between commodity money, representative commodity money, and partially backed representative commodity money
What will be an ideal response?
Gordon suggests that full indexation of production costs to nominal AD would solve the macroeconomic externality. However, individual firms would be unlikely to extend full indexation to their workers because
A) its local customers may not buy its products at the new price level. B) its suppliers may reside in foreign countries and are therefore, not subject to indexation. C) other competitor firms will not index their wages. D) All of the above.
If the U.S. interest rate is 4% per year and the U.K. interest rate is 9% per year, then:
a. an investor will see no reason to invest in the United Kingdom. b. an investor will borrow money in the United Kingdom and invest it in the United States. c. an investor can borrow money in the United States and invest it in the United Kingdom and profit. d. an investor will find that the returns are the same in both countries.