Choices must be made because of scarcity; people do not have enough time or money to get everything they want
a. True
b. False
Indicate whether the statement is true or false
True
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Which of the following assumptions is found in Friedman's model but not in the new classical model?
A) Supply of labor depends on expected real wage. B) Workers gradually adapt their expectations of the price level to the actual price level. C) imperfect information D) market-clearing labor market
The IS-MP model assumes the Fed targets ________, and the IS-LM model assumes the Fed targets the ________
A) the expected inflation rate; the unemployment rate B) short-term nominal interest rates; the money supply C) the output gap; the long-term real interest rate D) short-term real interest rates; the expected inflation rate
Oligopolies exist only in industries that produce large durable goods such as automobiles and refrigerators
Indicate whether the statement is true or false
In response to the recession of 2008-2009, the Fed doubled its asset holdings from $925 billion at mid-year 2008 to more than $2 trillion by mid-year 2009 . This policy
a. reduced the reserves available to banks, leading to a larger money supply. b. reduced the reserves available to banks, causing the money supply to decline. c. increased the reserves available to banks, leading to a larger money supply. d. increased the reserves available to banks, causing the money supply to decline.