Monetary policy should be countercyclical, which implies that it should be loosened during a recession and tightened during periods of inflation

According to the life-cycle hypothesis,

A) the present value of lifetime consumption equals the future value of lifetime income. B) the income earned in a lifetime will be evenly divided between consumption and saving. C) household consumption depends on income that households expect to receive each year, and financial markets are used to smooth consumption in response to changes in transitory income. D) households use financial markets to transfer funds from periods when income is high to periods when income is low.

Which of the following statements is correct?

A. The pure monopolist will maximize profit by producing at that point on the demand curve where elasticity is zero. B. In seeking the profit-maximizing output, the pure monopolist underallocates resources to its production. C. The pure monopolist maximizes profits by producing that output at which the differential between price and average cost is the greatest. D. Purely monopolistic sellers earn only normal profits in the long run.