Which of the following is included in M2 but NOT in M1?
A) NOW accounts
B) demand deposits
C) currency
D) money market mutual fund shares (retail)
D
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A key implication of the policy irrelevance proposition is that
A) only unanticipated policy actions can influence real Gross Domestic Product (GDP). B) only fully anticipated policy actions can influence real Gross Domestic Product (GDP). C) the rational expectations hypothesis is incorrect. D) none of the above.
Once the marginal product of capital is equal to the real rental cost of capital ________
A) inventories will stabilize B) depreciation will equal the marginal rate of substitution C) the economy will reach full employment D) a profit-seeking firm will stop acquiring capital
Where should a producer stop devoting more of his spending on labor if initially the MRP of the additional dollar spent on labor is higher than the MRP of the additional unit spent on tools?
a. MRP/$ of additional labor falls below MRP/$ of additional tools. b. MRP/$ of additional capital increases above MRP/$ of additional tools. c. MRP/$ of additional labor becomes equal to MRP/$ of additional tools. d. MRP/$ of the additional labor falls to zero.
Which of the following is true in markets where price controls are applied?
A) Price controls distort the incentives faced by both buyers and sellers. B) Price controls clarify the incentives faced by both buyers and sellers. C) Price controls increase the number of exchanges that will occur. D) Price controls are enacted solely with consumers' interests in mind.