Monetarism is a school of thought put forth by Milton Friedman. He argued that the economy would ordinarily
A) be below potential GDP.
B) be at potential GDP.
C) be unstable.
D) be above potential GDP.
Answer: B
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As the marginal propensity to consume (MPC) decreases, the spending multiplier:
a. increases. b. decreases. c. remains constant. d. becomes undefinable.
Suppose that a firm has only one variable input, labor, and firm output is zero when labor is zero. When the firm hires 6 workers the firm produces 90 units of output. Fixed costs of production are $6 and the variable cost per unit of labor is $10 . The marginal product of the seventh unit of labor is 4 . Given this information, what is the marginal cost of production when the firm hires the 7th
worker? a. $1.50 b. $2.50 c. $5 d. $10
How is the value added for each firm calculated?
a. by multiplying the product value for the previous firm with the product value for the
current firm
b. by dividing the product value for the current firm by the product value for the next firm
c. by subtracting the product value for the previous firm from the product value for the
current firm
d. by adding the product value for the current firm to the product value for the next firm
Consider two straight-line PPFs. They have the same vertical intercept, but curve I is flatter than curve II. The opportunity cost of producing the good on the horizontal axis
What will be an ideal response?