In Figure 17-3 above, suppose we are working under the assumption of the Lucas model. The Fed has been following an announced policy of "zero money growth for an indefinite period
" Suddenly and without warning it produces positive money growth and a "money surprise." This would result in a movement between points A) A and C.
B) A and B.
C) D and B.
D) D and A.
E) A and D.
A
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For economists, substitutes for laboratory experiments often come in the form of
a. natural experiments offered by history. b. untested theories. c. "rules of thumb" and other such conveniences. d. reliance upon the wisdom of elders in the economics profession.
Which of the following is an example of economies of scale?
A. To attract firms to locate in its state, the state government reduced the tax rate that businesses must pay on its profits, thus lowering the costs to firms who locate in the state. B. As the computer industry has expanded, the number of professionally trained computer programmers has also increased, which has caused the salaries of computer programmers to increase. C. A firm increases in size and is therefore able to lower its health insurance costs because as the size of the group insured increases, the premium per person decreases substantially. D. As the demand for calculators increased, the price of calculators actually fell.