If real money demand increases 5% and real money supply increases 10%, by about how much does the price level change?
A. Unchanged
B. Rises by 5%
C. Rises by 2%
D. Falls by 5%
Answer: B
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Staggered price setting ________
A) leads to frequent price adjustments B) occurs when firms fail to consider the behavior of their competitors C) is generally illegal D) all of the above E) none of the above
Equality of opportunity demands fair rules and does not require transfer programs
a. True b. False
Which of the following most clearly indicates that fiscal policy is becoming more expansionary?
a. An increase in the budget deficit relative to GDP b. A reduction in the budget deficit relative to GDP c. An increase in the budget surplus relative to GDP d. An increase in the nominal (dollar) size of the budget deficit
Taxes create deadweight loss when they
a. distort behavior. b. cause the price of the product to increase. c. don't raise sufficient government revenue. d. cannot be computed easily.