What is a liquidity trap? What are the implications of a liquidity trap on monetary policy?
What will be an ideal response?
A liquidity trap is a situation in which money created by the Fed to stimulate the economy is hoarded rather than being put to use. The liquidity trap renders monetary policy useless.
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If a worker receives 6 percent higher nominal wages over a year in which inflation is 2 percent, the worker's real wages have
A) risen by 8 percent. B) risen by 4 percent. C) risen by 3 percent. D) fallen by 3 percent. E) fallen by 4 percent.
Rental Car Maintenance Why do rental cars require more maintenance in their first 50,000 miles than comparable cars driven by private owners?
The marginal utility gained from the consumption of successive units of a typical good:
A. tends to decrease. B. tends to increase. C. may increase or decrease depending on the cost of the good. D. tends to stay the same.
Assume Ajax Company employs 100 workers and total revenue is $400,000 per week. When Ajax Company employs 101 workers, total revenue is $405,000 . The marginal revenue product of the 101st worker is:
a. $40,000. b. $5,000. c. $405,000. d. none of these.