The primary criticism by Keynesians of the credibility argument for rules is that
A. rules that reduce presidential and congressional influence over monetary policy could ultimately be harmful to the economy.
B. the cost of losing flexibility over policy choices may exceed the cost of gaining credibility.
C. reputations are a less costly method of maintaining credibility.
D. reputations are a less costly method of gaining credibility.
Answer: B
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Assume the graph shown represents Dana's budget constraint. If Dana's income to spend on these two items decreased, which of the following could be said?
A. Dana will buy more hairbands now because they are relatively less expensive.
B. Dana will be able to buy less of both goods.
C. Dana will derive more utility from each item, because she values each one more now that she's poorer.
D. All of these are true.
Maryann and Don want to open their own deli. To do so, Maryann must give up her job, at which she earns $20,000 per year, and Don must give up his part-time job, at which he earns $10,000 per year. They must liquidate their money market fund, which earns $1,000 interest annually. The rent on the building is $10,000 per year, and expenses for such necessities as utilities, corned beef, and pickles
are $35,000 annually. What minimum amount of revenue per year would make it worthwhile, financially, for Maryann and Don to operate the deli? a. $10,000 b. $35,000 c. $45,000 d. $31,000 e. $76,000
The study of how firms interact in a market is a
a. waste of time b. normative subject c. microeconomic topic d. topic in political science e. macroeconomic topic
Relative to barter, money does NOT
A. facilitate specialization and exchange. B. increase the frequency of transactions. C. reduce transaction costs. D. require a "double coincidence of wants."