Most economists believe the principle of monetary neutrality is
a. relevant to both the short and long run.
b. irrelevant to both the short and long run.
c. mostly relevant to the short run.
d. mostly relevant to the long run.
d
You might also like to view...
Suppose our tastes can be represented by the function 
. It is often observed that people become more rigid --- more set in their ways --- as they get older. What parameter is changing as we get older --- and how is it changing? (Explain.)
What will be an ideal response?
As domestic income rises, net exports will tend to
a. fall, since exports remain the same but imports increase. b. rise, since exports remain the same but imports fall. c. fall, since exports are lower and imports remain the same. d. rise, since exports are higher and imports remain the same. e. may either rise or fall, since exports and imports change in opposite directions.
In a competitive labor market, if a firm pays a worker less than that worker's VMP, then in the long run:
A. competing firms will hire the worker away. B. the supply of workers will fall. C. the firm will earn positive economic profits. D. the worker will have no incentive to work hard.
To correct for a negative externality, a government might impose a uniform tax related only to the physical quantity of pollution if
A) the administrative costs are high. B) the cost of ascertaining the actual economic costs are relatively small. C) the economic damages are zero. D) the economic damages associated with the pollution are different across different locations.