The monetary transmission mechanism that links monetary policy to GDP through real interest rates and investment spending is called the
A) traditional interest-rate channel.
B) Tobins' q theory.
C) wealth effects.
D) cash flow channel.
A
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When majority rule voting is used to determine whether to purchase a public good,
A) the efficient outcome is not assured. B) the median voter gets her way. C) the sum of the marginal benefits is ignored. D) All of the above.
Which of the following could explain why hockey players earn such high income?
a. All of the following are correct. b. Average careers are very short; the chances of being unemployed are greater than in many other jobs. c. The income effect encourages them to work more as the wage increases. d. Many people want to become hockey players. e. The threat of injury makes the job more exciting than other jobs.
Based on the graph showing an increase in the growth of the money supply, if the economy maintains a 6 percent inflation rate for a fairly long time, people’s expectations will adjust and move the economy from ______.
a. point B to point A
b. point B to point C
c. point C to point A
d. point C to point B
Assume that Spain will either specialize in producing cars or TVs. What is their opportunity cost of producing 8 TVs?
