What is meant by the expression, "There is too much money chasing too few goods"?
a. People spend too much time chasing after money.
b. An expansion in the supply of money relative to the availability of goods and services is causing an increase in the general level of prices.
c. The value of money will tend to decline when the supply of gold increases.
d. People would be better off if the monetary authorities increased the supply of money more rapidly.
B
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Seigniorage refers to
A) real resources a government earns when it prints money to use for spending on goods and services. B) nominal resources a government earns when it prints money to use for spending on goods and services. C) real resources a government earns when it prints money. D) nominal resources a government earns when it prints money. E) real resources a government earns when it issues bonds to use for spending on goods and services.
In the Friedman-Lucas money surprise model, a surprise increase in money supply growth
A) has no effect on inflation. B) increases inflation less than in proportion to the growth rate of the money supply. C) increases inflation in an equal proportion to the growth rate of the money supply. D) increases inflation more than in proportion to the growth rate of the money supply.
The natural rate of unemployment is:
a. Fixed and unchanging in the long-run. b. The rate that governments should use as their goal, in the sense that they should apply prudent monetary and fiscal policies to achieve it. c. The unemployment rate to which a nation gradually moves if the real wage is free to fluctuate and the nation's actual inflation rate equals its expected inflation rate. d. Basically a long term goal that no country every really achieves, but it serves as a Northern Star for policy makers. e. None of the above.
When comparing market and public sector decision making, which statement is NOT true?
A. Self-interest is the motivating force in each decision making arena. B. Collective (political) outcomes and economic outcomes may differ. C. In both decision making sectors, there are scarcity constraints. D. In both decision making sectors, majority rule is how things are done.