When the money supply is expanding rapidly and the general level of prices increasing sharply, economic growth is
A) slowed by the resulting unpredictability of the future level of prices.
B) enhanced because profits are higher so that capital investment is greater.
C) enhanced because existing debt is reduced in value, so people are willing to buy more goods.
D) enhanced as economic activity grows more rapidly.
A) slowed by the resulting unpredictability of the future level of prices.
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A Prisoners Dilemma illustrates the fact that
a. Rational choices can lead to inefficient outcomes
b. Rational choices always leads to good outcomes
c. Rational choices always lead to inefficient outcomes
d. None of the above
The use of a central planning board or commission to answer the fundamental economic questions is typical of what kind of economy?
a. traditional b. supply c. command d. market
Critics of the current system of Fed independence contend that
A) the current system is undemocratic. B) voters have too much say about monetary policy. C) the president has too much control over monetary policy on a day-to-day basis. D) the Board of Governors is held responsible for policy missteps.
The time it takes policy makers to see that the economy is going into a recession or an inflation is known as the recognition lag.
Answer the following statement true (T) or false (F)