The monetarists believed that
A. the way to fight recessions was by means of fiscal policy.
B. the quantity theory of money has a great deal of validity.
C. recessions generally come about because the Federal Reserve is not allowing the money supply to grow fast enough.
D. the money supply should be allowed to grow at least 8 percent a year.
B. the quantity theory of money has a great deal of validity.
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Suppose a U.S.-made machine costs $500 and the exchange rate was 100 yen = $1 yesterday. Today the exchange rate is 90 yen = $1 . You know then that the
a. machine would now cost more dollars b. machine would now cost the Japanese firm less yen c. machine would now cost less dollars d. machine would now cost the Japanese firm more yen e. yen has depreciated in value
Consider the following ratio: the average annual inflation rate/the average annual money growth rate. A country with a ratio less than one would have:
A. to have a high unemployment rate. B. an economy suffering from a recession. C. an average inflation rate less than the average rate of money growth. D. an average inflation rate greater than the average rate of money growth.
The goods or services purchased by a business for immediate use in the production process are known as
A. intermediate outputs. B. intermediate inputs. C. production outputs. D. production inputs.
Return to the market for cigarettes from the previous questions. Suppose the government implements the tax you found in the previous question. But suppose the government is making a mistake. The true demand curve is in fact , and this is not a result of any behavioral bias. Compute the deadweight loss of the government's tax policy
a. DWL = 0. b. DWL = 500. c. DWL = 1,000 d. DWL = 2,500.