Romer and Romer found evidence that money is not neutral because
A) in several episodes, such as 1979-1982, changes in monetary policy led to recessions.
B) they found that inflation was highly correlated with the rate of growth of the money supply.
C) if money were neutral, no one would care what the Fed does.
D) they found no evidence that productivity changes or changes in government spending contributed to business cycles; only monetary changes preceded every recession.
A
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Competition would probably be abolished if society could find a way to abolish
A) inequality. B) scarcity. C) money. D) economists.
The ability of a commercial bank to increase the money supply is limited by the
A) availability of eligible borrowers and the bank's reserves in relation to legal reserve requirements. B) demand of the public for liquidity. C) eligibility of the bank for currency drafts and its ratio of M2 to M1. D) willingness of customers to withdraw currency for circulation.
Julio makes wine and beer. Last year he made 20 bottles of wine and 20 cases of beer. If the price of grapes goes down (making wine cheaper to make), Julio will be able to make the same amount of wine and more beer
a. True b. False Indicate whether the statement is true or false
Suppose a consumer is willing to pay a maximum of $45 for a brand of perfume whose price increases from $37 to $41 . What will be the impact of this price rise on the consumer surplus?
a. Consumer surplus will increase by $8. b. Consumer surplus will decline by $8. c. Consumer surplus will increase by $4. d. Consumer surplus will decline by $4.