Which of the following statements is true about the misperceptions theory?
A. Both anticipated and unanticipated changes in the nominal money supply have real effects on the economy.
B. Anticipated changes in the nominal money supply have real effects, but unanticipated changes are neutral.
C. Unanticipated changes in the nominal money supply have real effects, but anticipated changes are neutral.
D. Neither anticipated nor unanticipated changes in the nominal money supply has real effects on the economy.
Answer: C
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The LM curve will become steeper when
a. there is a larger money demand increase per unit increase in income. b. money demand is less sensitive to the interest rate. c. money demand is more sensitive to the interest rate. d. Both a and b e. Both a and c
Which of the following actions has the best potential for experiencing economies of scope?
A) producing a product that has appeal to a wider segment of the market B) producing computers and software C) producing spaghetti and soft drinks D) producing cars and trucks
The growth rate of productivity is the most important determinant of material well-being in the short run
a. True b. False Indicate whether the statement is true or false
Which of the following is an example of a positive, as opposed to normative, statement?
a. Inflation is more harmful to the economy than unemployment is. b. If welfare payments increase, the world will be a better place. c. Prices rise when the government prints too much money. d. When public policies are evaluated, the benefits to the economy of improved equality should be considered more important than the costs of reduced efficiency.