Changes in the availability of money have little impact on the macro performance of the economy.
Answer the following statement true (T) or false (F)
False
Changes in the supply of money lead to changes in interest rates that influence aggregate demand and therefore output and the price level.
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Suppose you and I are the only two individuals in the world and we both face individual risk in the following way: I get more consumption in state 1 than in state 2 while you get more consumption in state 2 than in state 1. a. Suppose we are both risk averse and our tastes are state-independent. Will we fully insure one another in a competitive equilibrium?
b. How does your answer change if there is aggregate risk in the sense that overall consumption is higher in state 2 than in state 1? c. Is it possible that we insure each other if our tastes are risk neutral and state-independent? If so, are the terms actuarily fair? d. Suppose that there is no aggregate risk but our tastes are state-dependent. How might we fully insure each other if our beliefs about the probability of each state differ? What will be an ideal response?
In the early 1900s, Henry Ford revolutionized the automotive manufacturing industry by instituting the assembly line. What impact did the assembly line method for producing automobiles have on the per-worker production function for Ford?
A) It became linear. B) It shifted down. C) It shifted up. D) It became flatter.
How does the leader's behavior in the quantity-leadership (Stackelberg) game compare to that in the analogous price-leadership game?
a. It behaves as a "puppy dog" in both. b. It behaves as a "top dog" in the quantity leadership game but a "puppy dog" in the price leadership game. c. It behaves as a "top dog" in the quantity leadership game but a "puppy dog" in the price leadership game. d. It behaves as a "top dog" in both.
Economic profit is:
A. implicit and explicit revenues minus implicit costs. B. total revenue minus explicit measurable costs. C. implicit and explicit revenues minus implicit and explicit costs. D. explicit revenues minus explicit costs.