Suppose that Canadian farmers can grow wheat more cheaply than can U.S. farmers. In the interest of efficiency, what is the desirable outcome?
A) Allow the Canadian farmers to sell their wheat for a lower price.
B) Pass a law in Canada mandating a minimum price for wheat equal to what is charged by U.S. farmers.
C) Pass a law in the United States mandating a maximum price for wheat equal to what is charged by Canadian farmers.
D) Have U.S. citizens boycott Canadian wheat.
Answer: A
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The difference between the monetarist and Keynesian views on discretionary monetary policy is that the monetarists
a. believe monetary policy is a stabilizing force and Keynesians believe it is primarily destabilizing. b. Keynesians think that monetary policy is always used effectively. c. believe monetary policy is a destabilizing force and Keynesians believe it is potentially stabilizing. d. favor "fine tuning" the economy by use of monetary policy while the Keynesians do not.
The most important responsibility of the Fed is to
A) clear checks. B) supervise member banks. C) serve as fiscal agent for the U.S. Treasury. D) control the money supply.
Wage rates fall. This increases __________ and the __________ curve shifts rightward
A) aggregate demand (AD); AD B) short-run aggregate supply (SRAS); AD C) short-run aggregate supply (SRAS); SRAS D) employment; AD E) none of the above
Which of the follow is NOT an example of a market?
A. Retail trade of chocolate ice cream in Boston. B. The buying and selling of homes in Kansas City. C. The farmer's market in Madison, Wisconsin. D. The buying and selling of used cars.