Economists who accept the quantity theory of money favor a monetary rule because they believe the short-run effects of monetary policy are unpredictable and the long-run effects are on the price level, not real output.
Answer the following statement true (T) or false (F)
True
The quantity theory of money suggests a direct link between the money supply and inflation, leading them to favor a monetary rule.
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In the long run, firms in a perfectly competitive market:
A. produce a quantity that maximizes profits. B. earn zero economic profit. C. choose the level of output that minimizes average total costs. D. All of these are true.
The social security tax is a:
a. progressive tax at all income levels. b. regressive tax above a certain income level. c. proportional tax at all income levels. d. none of these.
The unemployment rate is lowest for what group?
a. All groups have the same unemployment rate. b. People who are between 16 and 19 years of age c. People who are 55 and older years of age d. People who are between 24 and 54 years of age
The size of a tax and the deadweight loss that results from the tax are
a. positively related. b. negatively related. c. independent of each other. d. equal to each other.