Long-run increases in living standards, as measured by real GDP per person, are primarily the result of increases in:
A. government budget surpluses.
B. average labor productivity.
C. the money supply.
D. population.
Answer: B
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To use money growth as a short-term monetary policy instrument, a central bank must:
A. believe the deposit expansion multiplier is volatile and unpredictable. B. believe there is a stable link between the monetary base and the rate of inflation. C. believe that only money matters. D. believe that there is an unpredictable relationship between money aggregates and inflation.
When the money supply increases, there is an excess _____ of money. As a result, interest rates _____ and aggregate demand _____
Fill in the blank(s) with correct word
When supply increases
A. demand decreases. B. price increases because excess supply develops at the original price. C. price decreases because a less supply is available at the original price. D. price decreases because a excess supply at the original price.
According to the above table, which assumes that opportunity costs of producing goods X and Y are constant, Sherry has comparative advantage in production of
A. Good X. B. Good Y. C. both goods. D. neither good.