Which one of the following statements is not true?
a. There is an opportunity cost associated with setting a money supply target.
b. There is an opportunity cost associated with setting an interest rate target.
c. When the Fed targets the money supply, the interest rate moves in an inappropriate direction.` d. The Fed targeted the money supply in the 1980s in order to bring inflation under
control.
e. The Fed targeted interest rates in the late 1980s and 1990s in order to stimulate investment and aggregate demand.
C
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A chain-weighted index
A) calculates changes in prices by using an average of base years from neighboring years to obtain a more accurate measure of real GDP growth. B) is used to understate the rate of inflation. C) is a useful tool for determining which fence to purchase. D) uses neighboring years' data to calculate changes in nominal GDP.
Implicit costs are
A) costs that are measured in dollars. B) costs that do not involve an exchange of money. C) costs that typically involve the exchange of money. D) the same as explicit costs.
A relationship that shows the technological possibilities for an economy as a whole is called a
A) production function. B) utility possibilities frontier. C) production possibilities frontier. D) budget constraint.
Marginal revenue is the change in total revenue from selling one more unit of output
a. True b. False