Why do many economists believe that money affects output? What is the empirical evidence in support of that belief?
What will be an ideal response?
Except for the classical (RBC) model of the economy, other models provide theoretical reasons for the effect of money on output. These include the misperceptions theory, which finds that unanticipated changes in money growth influence output, and the Keynesian theory, which shows that the failure of prices to adjust to return the economy to equilibrium leads money to affect output. Friedman and Schwartz looked at historical episodes in which independent changes in the money supply led to changes in output. This is supported by the work of Romer and Romer, who reviewed and updated the Friedman and Schwartz analysis, and the Volcker episode in the early 1980s.
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If sellers compete against buyers, then
A) sellers would prefer to face more buyers in the market. B) sellers would prefer to face fewer buyers in the market. C) buyers would prefer to face fewer sellers in the market. D) buyers would prefer to face more sellers in the market. E) both B and C are true.
Refer to Table 8-17. What is real GDP in 2016, using 2011 as the base year?
A) $3,320 B) $3,690 C) $6,360 D) $7,035
The work of Roger Ransom has shown that the burden of the Navigation Acts on colonial trade to continental Europe
a. was disproportionately large on the Southern colonies. b. amounted to 5 percent of colonial income. c. amounted to less than one percent of colonial income. d. Both a and b are correct. e. Both a and c are correct.
GDP as a measure of the nation's economic performance
A. includes the value of final goods and services produced in the economy. B. excludes nonmarket transactions. C. excludes the value of intermediate goods. D. excludes the sale of secondhand goods.