The view that union wage demands may be a source of inflation would be best associated with cost-push inflation
a. True
b. False
Indicate whether the statement is true or false
True
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If OPEC, a group of oil producing nations, cuts oil production to increase the total revenue, OPEC presumes that the demand for oil is
A) perfectly elastic. B) unit elastic. C) elastic. D) inelastic.
For what values of a and b will the following production function exhibit increasing, decreasing or constant returns to scale? q = (La + Ka)1/b
What will be an ideal response?
Classical economists or modern day monetarists would suggest that the Fed should
a. always lower the discount rate in order to combat recessions b. increase the reserve requirement in order to reduce the threat of inflation c. set the rate of increase in the money supply to be approximately equal to the economy's long-run full-employment rate of growth d. set the rate of increase in the money supply to be approximately equal to the discount rate e. use its tools, such as raising the discount rate, increasing the reserve requirement,and selling securities, in order to bring inflation down to 0 percent
Debt monetization means that a government pays off its debt by:
What will be an ideal response?