Which of the following is a problem in pursuing monetary policy?
A) The lag between a change in the quantity of money and its effect on economic activity may be long.
B) The Fed must reveal to the public anytime the Fed changes its policy.
C) Monetary policy must be approved by the Congress.
D) The Fed cannot control the federal funds rate.
E) None of the above answers is correct.
A
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Interest is not the price of money, which can be seen when interest rates rise rapidly in an economy where
A) barter exchange displaces money exchange. B) people lose interest in money. C) the demand for money increases rapidly. D) the supply of money increases rapidly.
If the firms in a monopolistically competitive industry are suffering short-run losses, which of the following will occur in the long run?
a. Some firms will enter the industry. b. Customers of firms that leave the industry will switch to remaining firms. c. Firms that remain in the industry will face reduced demand. d. Firms will continue to incur losses. e. There will be no excess capacity.