Mainstream economists question the new classical assumption that:
A. excessive growth of the money supply is a cause of inflation.
B. the price level is determined by aggregate demand and aggregate supply.
C. demand creates its own supply.
D. wages and prices are equally flexible upward and downward.
D. wages and prices are equally flexible upward and downward.
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The monetary policy instrument the Federal Reserve chooses to use is the
A) federal funds rate. B) monetary base. C) fixed exchange rate. D) discount rate. E) flexible exchange rate.
Refer to Table 26-2. Consider the hypothetical information in the table above for potential real GDP, real GDP, and the price level in 2016 and in 2017 if the Federal Reserve does not use monetary policy
If the Fed wants to keep real GDP at its potential level in 2017, it should A) increase income taxes. B) buy Treasury securities. C) increase the required reserve ratio. D) sell Treasury securities.
A monopolistically competitive firm cannot earn an economic profit in the long run
a. True b. False Indicate whether the statement is true or false
Causation and Correlation are generally the same thing.
A. True B. False C. Uncertain