When decisions are made by majority rule, the individual consumption-payment link is broken
a. True
b. False
Indicate whether the statement is true or false
True
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The HPAE have been more open to imports than most developing countries
Indicate whether the statement is true or false
In the New Keynesian open economy model, suppose the exchange rate is flexible and there is a decline in total factor productivity
A) expansionary fiscal policy is necessary. B) contractionary monetary policy is necessary. C) expansionary monetary policy is necessary. D) no policy intervention is necessary.
Which of the following is a case of asymmetric information:
A. The buyer and seller of a used car don’t know how long the car will operate. B. A provider of health insurance does not know whether a specific client is a smoker or not. C. Neither you nor the insurance company has perfect information about whether a flood will occur. D. None of the above are examples of asymmetric information.
Which of the following will increase the money supply?
A) increasing the required reserve ratio B) an open market sale C) raising the discount rate relative to the federal funds rate D) none of the above