The rational expectations hypothesis indicates that a monetary policy designed to alter real Gross Domestic Product (GDP) will fail unless
A. changes in the money supply are completely anticipated.
B. there are unanticipated changes in the money supply.
C. labor unions have long-term contracts.
D. wages and prices are flexible.
Answer: B
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Provide some examples of industries near your school that operate in monopolistic competition (excluding those given on the text page in the figure)
What will be an ideal response?
If the price of a Domino's pizza decreases while the price of a Pizza Hut pizza is unchanged, then probably the demand for Pizza Hut pizza:
A. increases as some people switch from Pizza Hut to Domino's. B. decreases as some people switch from Pizza Hut to Domino's. C. remains unchanged. D. will depend on what happens to the supply of Pizza Hut pizza.
The ability to pay principle suggests that: a. traditional exemptions should be removed since they are more frequently used by people with ability to pay more taxes. b. people with different levels of income should be treated in the same manner
c. individuals receiving the benefits should be those who pay for them. d. those with the greatest ability to pay taxes should pay more than those with the least ability to pay taxes.
When the government raises revenue by printing money, it imposes an "inflation tax" because the:
A. real value of money holdings falls. B. interest rate falls. C. difference between nominal and real interest rates becomes smaller. D. nominal value of money holdings falls.