Which of the following disinflationary monetary policies would classical economists prefer?
A. A cold turkey approach that is announced, but not credible
B. A cold turkey approach that is announced and credible
C. A gradual approach that is announced and credible
D. A gradual approach that is unannounced
Answer: B
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As the price of a good declines, a utility-maximizing consumer will respond by purchasing more of that good
a. True b. False Indicate whether the statement is true or false
The accountants hired by the Brookside Racquet Club have determined total fixed cost to be $75,000 . total variable cost to be $130,000 . and total revenue to be $145,000 . Because of this information, in the short run, the Brookside Racquet Club should
a. shut down. b. exit the industry. c. stay open because shutting down would be more expensive. d. stay open because the firm is making an economic profit.
Other things constant, a fall in the inflation rate causes the velocity of money to increase
Indicate whether the statement is true or false
A consumer allocates his budget according to rules of utility maximization
What are the rules of utility maximization and how do they explain the paradox of value, which is that diamonds are expensive but useless, while water is inexpensive but essential?