The gains from trade within a price system is
A) the sum of consumer surplus and producer surplus.
B) consumer surplus less producer surplus.
C) consumer surplus divided by producer surplus.
D) consumer surplus multiplied by producer surplus.
Answer: A
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All of the following are determinants of money demand except
A) the cost of transferring funds from interest earning assets to checking accounts. B) expectations about the future price level. C) the money supply. D) Real GDP.
The best argument against monetarists' arguments that steady money growth would prevent fluctuations in inflation and unemployment is that:
a. the government has best control over fiscal policy and should focus on that. b. large fluctuations in the money supply cannot occur because the supply of money is limited. c. steady money growth does not necessarily mean steady aggregate demand if velocity is not stable. d. steady growth in the money supply percents fluctuations in output only if aggregate prices are constant.