Under an assumption of monetary neutrality, a change in the nominal money supply has
A. a more than proportionate effect on the price level.
B. no effect on the price level.
C. a proportionate effect on the price level.
D. a less than proportionate effect on the price level.
Answer: C
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Long time lags hamper the effectiveness of economic policy because: a. people don't want to wait for economic recovery
b. the longer unemployment lasts, the more intense inflation becomes. c. by the time the impact of a policy is felt, a new problem may have come along that requires a different policy, which may make the economic situation even worse. d. if inflation is allowed to continue for too long, it becomes immune to policy interference. e. if unemployment is allowed to continue for too long, it becomes immune to policy interference.
If the demand curve for computers increases:
a. More will be demanded at lower prices b. Less will be purchased at each possible price c. More will be demanded at the same prices d. More will be purchased at each possible price
Over the past decade, U.S. per capita consumption of water:
A. and energy have both increased. B. has increased, while per capita consumption of energy has fallen. C. and energy have leveled off or fallen. D. has fallen, while per capita consumption of energy has increased.
Figure 7.2
Refer to Figure 7.2. Assume that Ashley faces budget line AB with her $60 income. Then the opportunity cost to her of a book is:
A. one hamburger. B. two hamburgers. C. three hamburgers. D. four hamburgers.