A monetary growth rule means that
A) the Fed will raise interest rates if it thinks the economy is growing faster than potential.
B) the money supply should grow at a constant rate.
C) the Fed will lower interest rates if it thinks a recession is on the horizon.
D) the money supply should grow in response to economic conditions.
B
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Suppose the United States' production possibility frontier was flatter to the widget axis, whereas Germany's was flatter to the butter axis. We now learn that the German mark sharply depreciates against the U.S. dollar. We now know that
A) the United States has no comparative advantage B) Germany has a comparative advantage in butter. C) the United States has a comparative advantage in butter. D) Germany has a comparative advantage in widgets. E) Germany has lost its comparative advantage.
If a Cournot duopolist announced that it will double its output
A) it becomes the leader B) the other firm does not view the announcement as credible C) the other firm will shut down D) the other firm will double output also
Implicit government support for "too-big-to-fail" banks:
A. increases the scrutiny of the bank's risk by large corporate depositors. B. reduces the moral hazard problem of insuring large banks. C. reduces the risk faced by depositors with accounts less than $250,000. D. reduces the risk faced by depositors with accounts exceeding $250,000.
The amount of output produced by an average worker in one hour is per capita output.
Answer the following statement true (T) or false (F)