Any value of the money supply chosen by the Federal Reserve implies a specific value for:
A. potential output.
B. the budget deficit.
C. government purchases.
D. the nominal interest rate.
Answer: D
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At an exchange rate of $1 = €1 in Figure 36.1, there is
A. A surplus of dollars. B. Equilibrium in the foreign exchange market. C. a shortage of dollars. D. A shortage of euros.
Ramsey pricing is a good private enterprise basis for setting access prices
Indicate whether the statement is true or false
If money is moved from a consumer checking account into a consumer savings account,
A. M1 and M2 both remain unchanged. B. M1 decreases and M2 remains unchanged. C. M1 and M2 both increase. D. M1 increases and M2 decreases.
Constant returns to scale in a production function imply that doubling both capital and labor will also double output.
a. true b. false