What is the monetarist prescription for the reducing unemployment, and why?
What will be an ideal response?
Monetarists favor steady and predictable growth of the money supply. This allows people to think about real production decisions instead of worrying about changes in the money supply. According to monetarists, expansionary policies will not change the level of output but will cause inflation because AS is vertical at the natural rate of unemployment.
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Suppose y = Ak1/3, the capital-labor ratio is $30,000 per worker, the level of total factor productivity is 400, 50% of the population works, and there are 50 million workers. Real GDP per capita is
A) $4,930.85. B) $6,212.33. C) $7,765.41. D) $9,033.96.
All of the following, except one, are characteristics of monopolistic competition. Which is the exception?
a. There is a large number of sellers. b. Each seller faces a horizontal demand curve for its product. c. There are no significant barriers to entry or exit. d. Sellers produce differentiated products. e. There is a large number of buyers.