________ theory relates the quantity of money and monetary policy to changes in aggregate economic activity and inflation
A) Monetary
B) Fiscal
C) Financial
D) Systemic
A
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The U.S. can produce pizza for $7.50 each and barrels of beer for $37.50 each, and Germany can produce pizza for €5 each and barrels of beer for €15 each (€ is the symbol for the euro, the currency Germany uses). If the exchange rate is 1
50 $/€ then A) the U.S. has a comparative advantage in the production of beer. B) neither country has a comparative advantage in the production of beer. C) the U.S. has a comparative advantage in the production of pizza. D) the U.S. has a comparative advantage in the production of beer and pizza.
In the long run, which of the following is not a problem for a monopolist earning economic profit?
a. other firms have an incentive to create substitutes for the monopolist's product b. technological change tends to break down barriers to entry c. patents expire, licenses must be renewed, and new sources of essential resources may be discovered d. government often decides to regulate monopolies e. all profit will gradually be converted to consumer surplus
In the last few decades, income inequality in the United States has ___________ mostly because of the ____________
A. increased; poor getting poorer. B. increased; gains by the rich. C. decreased; gains by the poor. D. decreased; stagnation by the economy in general.
What is the best test of an economic theory?
a. its eloquence b. the plausibility of its assumptions c. its ability to predict real-world events, patterns, and changes d. whether it produces implications that are favored by the researcher