Since the growth in the money supply is unrelated to government spending, fiscal policy and monetary policy can be conducted independently
a. True
b. False
Indicate whether the statement is true or false
False
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If nominal wages are downwardly rigid, a countercyclical policy during a recession leads to ________
A) a fall in consumption B) an increase in tax rates C) an increase in employment D) a fall in investment
If a market is such that, at the market equilibrium quantity, the benefit of the last unit produced just equals its marginal cost
a. it has earned a positive economic profit b. it has achieved productive efficiency c. it has achieved allocative efficiency d. it has achieved economies of scale e. there are further trades than can increase producer surplus
The purchase of VCU2 by Tomas Tiergarten, a private resident, causes the nation's:
a. Monetary base to fall. b. M2 money supply to fall. c. M2 money multiplier to remain the same. d. M2 money supply to rise.
When a monopolist decreases the price of its good, consumers
a. continue to buy the same amount. b. buy more. c. buy less. d. may buy more or less, depending on the price elasticity of demand.