The desire of governments to be able to use both monetary and fiscal policies to pursue domestic goals of stable prices and full employment has been a reason that:
A. countries have tried to stabilize their exchange rates at a high level.
B. flexible exchange rates have been replaced with fixed exchange rates.
C. fixed exchange rates have been replaced with flexible exchange rates.
D. countries have tried to stabilize their exchange rates at a low level.
Answer: C
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If velocity does not change and if real GDP and the quantity of money grow at the same rate, then the price level
A) does not change and the inflation rate is zero. B) falls and the inflation rate is negative. C) rises and the inflation rate is negative. D) falls and the inflation rate is positive. E) rises and the inflation rate is positive.
Betsy's utility depending from her consumption of coffee is shown in the table above. Betsy's marginal utility from the 3rd cup of coffee per day is
A) 30. B) 85. C) 90. D) 10.
Exhibit 15-6 Aggregate demand and supply model
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In Exhibit 15-6, if the aggregate demand curve is at AD3, the government should:
A. raise taxes to move to AD1. B. cut taxes to move to AD2. C. not change its behavior. D. cut spending to move to AD2.
The argument for regulation is that markets can generate imperfect outcomes, while the argument for deregulation is that government sometimes worsens market outcomes.
Answer the following statement true (T) or false (F)