In comparing monetarism and rational expectations theory, we find that:
A. both favor policy rules and for the same reasons.
B. both favor policy rules, but for different reasons.
C. both favor discretionary policies.
D. the former favors discretionary policy, while the latter favors policy rules.
B. both favor policy rules, but for different reasons.
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If a firm increases its capital stock, real wages will likely ________ and the equilibrium quantity of labor will likely ________
A) decrease; decrease B) increase; increase C) decrease; increase D) increase; decrease
When the Fed lowers the federal funds rate, which of the following economic variables responds most slowly?
A) other short-term interest rates B) the inflation rate C) consumption expenditure D) the long-term real interest rate E) the supply of loanable funds
Credit cards were introduced in 1959. In 2014, the U.S. credit card balance was $880 billion. Which of the following is TRUE?
A) The $880 billion balance is part of M2 but not part of M1. B) The $880 billion balance is part of both M1 and M2. C) Only that portion of the $800 billion actually charged in 2009 is counted in M1 and M2. D) No part of the $880 billion balance is counted in M1 and M2.
Retained earnings are always sufficient to finance a firm's rapid expansion in a high-growth economy
Indicate whether the statement is true or false