A good economic theory, or model, weeds out the irrelevant facts from the relevant ones
a. True
b. False
Indicate whether the statement is true or false
True
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If the required reserve ratio is a uniform 25 percent on all deposits, the money multiplier will be
When a grocery store accepts your $5 bill in exchange for bread and milk, the $5 bill serves as a
A) unit of account. B) standard of deferred payment. C) store of value. D) medium of exchange.
Which of the following was not a major source of economic growth in the 1920s?
a. construction of residential housing b. production of consumer durables c. railroad construction d. automobile production
Monetarists reject using discretionary monetary policy as an effective stabilization tool because they believe:
a. if the money supply grows at a rate equal to the economy's long-run rate of economic growth, then the economy will be unstable. b. that changes in the money stock do not affect output or prices. c. the Fed will miss its money supply targets and make the economy worse. d. monetary policy can stimulate aggregate demand, but it cannot affect inflation.