If there is instability in the demand for commodities,
A) a monetary policy of fixed interest rates will perform better than a policy of holding the real money supply fixed.
B) a countercyclical money-supply policy will cause large swings in interest rates.
C) a fixed money supply policy will perform better than countercyclical changes in money supply.
D) a fixed money supply policy will stabilize interest rates.
B
You might also like to view...
Refer to the above figure. Line ABCD is a(n)
A) discretionary-policy curve. B) Phillips curve. C) natural rate of unemployment curve. D) aggregate demand curve.
Markets can and have been criticized for including or even encouraging a variety of negative pathologies such as greed, envy, fraud, corruption, inequality, and others. Our discussion of market ethics emphasized
A) that such criticisms have no basis in the actual experience with markets B) that market systems are primarily characterized by these kinds of activities C) that these kinds of activities stem from flaws of individuals that surface in all economic systems D) that these kinds of activities largely disappear when more economic resources and decisions are made publicly
Suppose, after undergoing genetic testing, you discover that you have a health condition that could result in the emergence of a disability which would make it impossible for you to continue to work. The probability of this happening is 50%. Currently your expected lifetime earnings are $5,000,000, but if the disability hits, your expected lifetime earnings will consist primarily of income earned from government support programs -- and will not add up to more than $1 million. a. Suppose that you are risk averse and your tastes are state-independent. Illustrate your expected utility in a graph with lifetime consumption on the horizontal and utility on the vertical axis. b. Illustrate how much you would be willing to pay for full insurance. c. Illustrate what you showed in (b) in a
different graph that has consumption in the "good" state on the horizontal and consumption in the "bad" state on the vertical. d. What would a full menu of actuarily fair insurance contracts look like in your graph from part (c)? Where would you optimize in that graph? e. Now suppose that you believe consumption will be more meaningful if the health condition does not materialize. What changes in your graph from part (d)? What will be an ideal response?
Does aid work? How strong is the evidence?
What will be an ideal response?