Assume a central bank follows a rule that requires it to take steps to keep the price level constant. If the price level rose because of an increase in aggregate demand and a decrease in aggregate supply that kept output unchanged, then
a. the central bank would have to decrease the money supply which would decrease output.
b. the central bank would have to decrease the money supply which would increase output.
c. the central bank would have to increase the money supply which would decrease output.
d. the central bank would have to increase the money supply which would increase output.
a
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Which of the following can be used as money?
A. checks B. cigarettes C. precious stones D. All of these
If you want to know the present value of a future payment received in one year, what formula can you use?
A) Present value equals future payment divided by one plus the rate of interest. B) Present value equals future payment times the current market rate of interest. C) Present value equals future payments times one plus the rate of interest. D) Present value equals one plus the rate of interest in decimals divided by future payment.
Modern economics as a field of study is usually thought to have begun with which of the following?
What will be an ideal response?
Regarding new inventions, which of the following statements is not true?
A. A new invention typically has little competition. B. This effective monopoly on the market earns the inventor abundant profit. C. That profit gets the attention of other potential inventors, who create competing products. D. Reduced to zero economic profits, the inventor goes out of business.