One of the problems with a strict monetary policy rule that sets a constant growth rate for the money supply is that when there are large shocks to the economy, the growth rate of _______, causing real GDP growth to slow down.
A. the average price level can fall
B. the average price level can rise
C. the velocity of money can fall
D. the velocity of money can rise
Ans: C. the velocity of money can fall
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Table 7-4 ? 6 346 490 600 692 775 846 ? 5 316 448 548 632 705 775 ? 4 282 400 490 564 632 692 CAPITAL 3 245 346 423 490 548 600 ? 2 200 282 346 400 448 490 ? 1 141 200 245 282 316 346 ? 0 1 2 3 4 5 6 ? LABOR ? ? ? ? ? Table 7-4 shows a production relationship. Assuming the labor input is fixed at 4, what will be the optimum capital input assuming an output price of $1 and a $90-per-day cost for one unit of capital?
A. 1 B. 2 C. 3 D. 4
The Fed's mostly used tool for changing the size of the money supply is
A. its power to change the discount rate. B. its power to change legal minimum reserve requirements. C. open market operations. D. changing the size of the government budget deficit.
As the price is raised along a straight-line demand curve, the demand curve becomes more elastic
a. True b. False Indicate whether the statement is true or false
A monopolist faces a demand curve given by P = 60 -2Q and has total costs given by TC = Q2. Its marginal revenue is MR = 60 - 4Q and its marginal cost is MC = 2Q. In autarky, what is the firm's equilibrium output?
a. 5 b. 10 c. 15 d. 20