The complete wage and price flexibility of the real business cycle framework implies that ________
A) the velocity of money is a constant
B) the velocity of money times the money supply is equal to the nominal value of transactions over a given period of time
C) aggregate output always equals potential output
D) sustained economic contractions, like the Great Depression, cannot occur in real, historical time
C
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The above figure shows the U.S. market for wheat. With no international trade, the price of wheat in the United States is ________ per ton. With international trade, the price of wheat in the United States is ________ per ton
A) $700; $300 B) $500; $700 C) $500; $300 D) $14; $16 E) $16; $14
Refer to the information above. What is the equilibrium level of GDP?
A) 300 B) 400 C) 450 D) 525
Some have argued that the Federal Reserve looked at the wrong indicator of monetary policy, and that the Fed mistakenly thought that monetary policy was "easy" because ______
a. the stock of money had grown rapidly b. the monetary base had grown rapidly c. market interest rates were low d. bank reserve ratios were low
Suppose you were asked, "Can you guess the height of the tallest living man? Is it more than 8 feet?" When people suggest an answer in the question they ask, it is a form of:
A. rule of thumb. B. time inconsistency. C. anchoring. D. positive framing.