Under the assumption of rational expectations, an anticipated increase in the money supply has no effect on
A) nominal GDP.
B) real GDP.
C) the price level.
D) velocity.
B
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In Macroland, 500,000 of the 1 million people in the country are employed. Average labor productivity in Macroland is $20,000 per worker. Real GDP per person in Macroland totals:
A. $10,000. B. $1,000. C. $40,000. D. $15,000.
Robert Lucas, a Nobel laureate in economics, argues that there are ________ returns to human capital
A) negative B) decreasing C) constant D) increasing
A nonmonetary opportunity cost is called a(n) ________, while a cost that involves spending money is called a(n) ________
A) implicit cost; explicit cost B) normal rate of return; asset C) accounting profit; economic profit D) accounting cost; explicit cost
"As soon as a mayor announced his/her 'get tough on crime' policy on New Year's day, criminals got scared and the crime rate went down." Suppose that the lower crime rate was actually caused by freezing cold temperatures in January?it was just too cold for anybody to be out robbing other people. Which fundamental hazard of the economic way of thinking did the mayor make?
a. believing that what's good for one person is good for the whole group (the fallacy of composition) b. failing to take into account the benefits of crime (the payoff fallacy) c. believing that association is the same as causation d. failing to understand the difference between positive and normative economics.