Economist Smith favors an activist monetary policy. He says that if the economy is going to be stabilized over time, it is necessary to fine-tune the money supply to the particular economic conditions that exist. What would economist Jones, who favors rules-based monetary policy, say to economist Smith?
A) Because of long lags, activist monetary policy is likely to be destabilizing rather than stabilizing.
B) There have been times when activist monetary policy has worked well.
C) There have been times when a constant-money-growth-rate rule has worked poorly.
D) Flexibility is desirable when it comes to monetary policy.
A
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The short-run aggregate supply curve is a relationship between
A) real GDP and price level. B) capital goods and consumer goods. C) unemployment and real GDP. D) inflation and time.
Under a rule of reason approach, an act is illegal
a. only if it is shown to result in an anticompetitive outcome b. if two parties merge c. if a firm engages in price discrimination d. if two firms engage in price fixing e. if two firms undertake a joint venture
Say a public good is provided to two consumers: John and Jill. John's willingness to pay for the good is P = 10 - Q, and Jill's is P = 20 - 2Q. The marginal cost to provide the good are 2Q. Assume the government must pay for providing this good by taxing Jill and John equally to raise the necessary revenue. When the optimal quantity of this good is provided, Jill's willingness to pay for the good is
A. 2. B. 4. C. 12. D. 48.
A speculative attack is:
A. the imposition of tariffs and quotas to prevent the inflow of foreign goods. B. a presumptive decrease in the officially fixed value of a currency. C. a massive selling of domestic currency assets by domestic and foreign financial investors. D. a presumptive increase in the officially fixed value of a currency.