Mateo values his camper at $4,000, and Nicole values it at $9,000 . If Nicole buys it from Mateo for $7,000, which of the following is true?
a. Mateo gains $3,000 of value, and Nicole gains $2,000 of value.
b. Mateo gains $7,000 of value, and Nicole loses $7,000 of value.
c. Mateo gains $7,000 of value, and Nicole gains $6,000 of value.
d. Mateo and Nicole both gain $7,000 of value.
A
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In the figure above, a decrease in the monetary base would create a change such as a
A) movement from point a to point b along the supply of money curve MS0. B) movement from point b to point a along the supply of money curve MS0. C) shift from the supply of money curve MS0 to the supply of money curve MS1. D) shift from the supply of money curve MS1 to the supply of money curve MS0.
If the government could raise taxes on one good, which product should the government increase tax rates in order to raise tax revenue?
a. Cigarettes b. Alcohol c. Sodas d. None of the above
An initial injection of money into the banking system will create new money supply through a sequence of excess reserves being transformed into loans. New money creation eventually ends because required reserves shrink loanable excess reserves in each round of new money creation
Indicate whether the statement is true or false
Economists who favor activist monetary policy often argue that
A) during the mid-1970s, money supply growth rates were nearly constant and still the economy went through a recession. B) during the mid-1970s, activist monetary policy was applied and the economy was healthy and stable. C) activist monetary policy is inflexible and this is one of its virtues; the money supply doesn't change every year in response to political considerations. D) activist monetary policy is likely to be destabilizing most of the time, but still it is the better way to proceed.