The Policy Trilemma states that a country or a monetary union can't pursue the following three policies at the same time
A) capital control, a fixed exchange rate, and an independent monetary policy.
B) free capital mobility, a fixed exchange rate, and an independent monetary policy.
C) free capital mobility, a flexible exchange rate, and an independent monetary policy.
D) capital control, a flexible exchange rate, and an independent monetary policy.
B
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Consumer confidence in the economy falls, and as a result, aggregate demand decreases. As real GDP falls below potential GDP, if the Fed followed Friedman's k-percent rule, the Fed would
A) increase the quantity of money more than usual. B) continue allowing the quantity of money to grow at "k" percent. C) increase government expenditures. D) lower the federal funds rate. E) raise the federal funds rate.
All of the following are cited as potential explanations for the decrease in demand for Kleenex-brand facial tissues except:
A) consumers switching to substitute products. B) market entry by lower-priced private brands. C) the failure of the producer of Kleenex tissues to develop any new and innovative products.
If a consumer's total expenditure on a good does not vary with price, then that consumer's demand curve is unit elastic over that range of prices
a. True b. False Indicate whether the statement is true or false
Which of the following is adverse selection?
a. the risk associated with selecting stocks in only a few specific companies b. the risk that a person will become overconfident in his ability to select stocks c. a high-risk person being more likely to apply for insurance d. after obtaining insurance a person having less incentive to be careful