According to the monetarists, the velocity of money is
A. constant by definition.
B. highly variable and unpredictable.
C. constant as a matter of empirical proof.
D. not constant but predictable.
Answer: D
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Irregular fluctuations in economic activity are known as the
a. business cycle. b. broken window fallacy. c. tradeoff between inflation and unemployment. d. ten principles of economics.
A monopoly is an inefficient way to produce a product because
a. it can earn both short-run and long-run profits. b. it faces a downward-sloping demand curve. c. the cost to the monopolist of producing one more unit exceeds the value of that unit to potential buyers. d. it produces a smaller level of output than would be produced in a competitive market.
Suppose a recession overseas reduces a country's exports. Which curve(s) in the aggregate demand and aggregate supply model would be affected, and which way would it (they) shift?
A weakness that could be noted about the unemployment rate is that it
A) does not account for the underutilization of workers. B) considers marginally attached workers as unemployed. C) overestimates the number of part-time workers. D) does not count part-time workers. E) counts discouraged workers as employed.