Some people believe that monetary policy should be made by rule rather than by discretion. One of their beliefs is that
a. setting a policy rule will limit the abuse of power of policymakers.
b. policymakers can better influence the political business cycle in their favor when following a policy rule.
c. a policy rule provides policymakers with the greatest flexibility to manage inflation.
d. if the Fed was required to follow a low-inflation policy, the economy would face a less favorable short-run trade-off between inflation and unemployment.
a
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Karl Marx believed that the entrepreneur derived his profit from __________________.
Fill in the blank(s) with the appropriate word(s).
Which of the following is the behavior of a rational consumer?
a. to seek to maximize his or her own total utility b. to purchase a good until marginal utility falls to zero c. to match his or her personal utility to that of all other consumers d. to maximize the variety of goods he or she purchases
The demand for the Franconian franc in the foreign exchange market equals 14,000 - 3,000e and the supply of francs in the foreign exchange market equals 2,000 + 2,000e, where e is the nominal exchange rate expressed in U.S. dollars per franc. If the franc is fixed at 3 U.S. dollars per franc, then to maintain this fixed rate Franconia's international reserves must:
A. decrease by 3,000 francs per period. B. decrease by 9,000 francs per period. C. increase by 9,000 francs per period. D. increase by 3,000 francs per period.
Refer to the below graph. Assume the market for this product is initially in equilibrium at the intersection of D2 and S1. The shift in supply from S1 to S2 is due to an excise tax imposed on the product. The excise tax revenue collected by the government will be:
A. $60
B. $36
C. $32
D. $24