Over time, the wealth of society increases and payments technologies get more efficient. What is the effect on money demand of these two changes?
A) Money demand rises proportionately to the rise in wealth.
B) Money demand rises, but less than proportionately to the rise in wealth.
C) The overall effect is ambiguous.
D) Money demand declines.
C
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In the neoclassical theory of growth, growth in ________ is the result of luck
A) saving B) income C) technology D) the real interest rate
When a temporary negative supply shock hits the economy, then in the short-run ________
A) if the central bank focuses on stabilizing output, it cannot stabilize inflation B) if the central bank focuses on stabilizing inflation, it cannot stabilize output C) the divine coincidence does not hold D) all of the above E) none of the above
The opportunity costs of production in two countries engaged in trade
a. determine which country has an absolute advantage b. influence their domestic inflation rates c. lead to a higher level of economic efficiency d. create shifts of the production possibilities frontiers (PPF's) of both nations e. define the limits of the terms of trade
Economists refer to the inputs that firms use to produce goods and services as
a. derived factors. b. derived resources. c. factors of production. d. instruments of revenue.