According to the policy irrelevance proposition, monetary policy can affect real variables
A. only in the short run when the policy is unanticipated.
B. in the long run only.
C. in both the short run and the long run.
D. as long as the policy is fully anticipated.
Answer: A
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If private savings equals $1.2 billion and private investment equals $1.5 billion, then there is a
A) current account balance. B) government sector deficit. C) private sector deficit. D) private sector surplus. E) government sector surplus.
Assume that empirical evidence shows a difference in mean earnings between two groups, say, majority and minority workers. What conclusion may be drawn?
a. The group with the lower earnings is being discriminated against. b. The group with the lower earnings is less productive. c. The group with the lower earnings has less human capital. d. Any of the above statements could, either partially or entirely, explain this difference.
Because of the multiple tools at its disposal, the Fed can control the money supply very precisely
a. True b. False Indicate whether the statement is true or false
When a profit-maximizing firm in a monopolistically competitive market is in long-run equilibrium,
a. the demand curve will be perfectly elastic. b. price exceeds marginal cost. c. marginal cost must be falling. d. marginal revenue exceeds marginal cost.