The economic theory of government predicts elected officials at the federal level will have incentives to act in ways that
A) cause inflation.
B) increase uncertainty and the instability of total demand.
C) secure short-term economic gains with deferred costs.
D) result in all of the above.
E) result in none of the above because they will usually want to be reelected.
D
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Everything else held constant, an increase in the currency ratio will mean ________ in the M2 money multiplier and ________ in the M2 money supply
A) an increase; an increase B) an increase; a decrease C) a decrease; an increase D) a decrease; a decrease
If a monopoly firm sells to competitive distributors and the distributors have a constant marginal cost of $2 and they are paying the profit-maximizing wholesale price of $8, what is the retail price of the product?
A) $6 B) $8 C) $2 D) $10
The invisible hand concept used to describe the guiding function of prices was developed by:
a. Henry George b. Milton Friedman c. Adam Smith d. John Kenneth Galbraith
Suppose good X is a normal good. Then a decrease in income would lead to
A. a movement along the demand curve. B. no shift of the demand curve. C. an outward shift of the demand curve. D. an inward shift of the demand curve.