Milton Friedman's assertion that "inflation is a monetary phenomenon" is based on:
A. the assumption of constant nominal GDP growth.
B. the assumption that the price level grows at the same rate as real GDP.
C. the quantity theory of money.
D. the assumption that the central bank increases the money supply by a constant rate every year.
Answer: C
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Recessions are typically
A) unintended and disruptive. B) easy to predict in advance. C) the result of non-monetary disturbances. D) events economists have a hard time explaining.
On a Phillips curve diagram, an increase in the rate of inflation, other things being equal, is represented by a(n):
a. upward movement along the Phillips curve. b. downward movement along the Phillips curve. c. upward shift of the Phillips curve. d. downward shift of the Phillips curve.
The decay rate is the speed at which economic profits go to zero
Indicate whether the statement is true or false
Figure 10-6
In Figure 10-6, the price at long-run equilibrium is
a.
$5.
b.
$10.
c.
$20.
d.
$35.