Which of the following helps to explain why the inflation fallacy is a fallacy?
a. Increases in the price level can be created by increases in money demand.
b. Nominal incomes tend to rise at the same time that the price level is rising.
c. As the price level rises, the value of a dollar falls.
d. Inflation only changes nominal variables.
b
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If firms have more capital, it is ________ for workers
A) harmful B) ineffective C) beneficial D) unimportant
Figure 11-6
At its optimal output level, the profit-maximizing monopolist in Figure 11-6 will earn a profit equal to
A. zero. B. (P2? P3)Q. C. P > Q. D. (P5? P6 )Q.
The Federal Reserve was established in 1913 to
A) prevent bad loans by requiring banks to hold reserves. B) stop bank panics by acting as lender of last resort. C) stimulate the economy by increasing bank reserves. D) prevent inflation by decreasing the money supply.
Antitrust laws in general are used to
a. prevent oligopolists from acting in ways that make markets less competitive. b. encourage oligopolists to pursue cooperative-interest at the expense of self-interest. c. encourage frivolous lawsuits among competitive firms. d. encourage all firms to cut production levels and cut prices.