The revenue that a government raises by printing money is called
A. currency credit.
B. seignorage.
C. monetary revenue.
D. currency inflation.
Answer: B
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Most economists accept the need for a required pension system because
A. economists believe that saving is good for the soul. B. people will save less than is optimal knowing that they can rely on welfare, and people may not have the information necessary to calculate their correct level of savings. C. people will save less than is optimal knowing that they can rely on welfare. D. people may not have the information necessary to calculate their correct level of savings.
Consider the purely competitive firm pictured above. The firm is earning:
A. normal profits since its price just covers ATC. B. economic profits since its price is above AVC. C. losses since it is operating at the shutdown point. D. normal profits since its price is above AVC.
An increase in the expected real interest rate will
A. have the same effect on the desired capital stock as a decrease in corporate taxes. B. have no effect on the desired capital stock. C. increase the desired capital stock. D. decrease the desired capital stock.
Refer to Figure 17-7. Consider the Phillips curves depicted in the graph above. The Fed announces its intention to decrease inflation from 10 percent to 5 percent per year, and it succeeds
If the assumptions of the rational expectations school hold true, and the Fed's announcement is credible, the rate of unemployment will be ________ in the short run. A) less than 5.5 percent B) 5.5 percent C) between 5.5 and 7.5 percent D) 7.5 percent