Money is neutral in the model economy we discussed because
A) the money supply is exogenous.
B) the money supply is intertemporal.
C) prices are fully flexible.
D) it is a barter economy.
C
Economics
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In the above figure, what is the magnitude of the marginal rate of substitution (MRS) at point a?
A) 1/2 B) the rate at which the consumer will give up magazines to purchase more CDs while preferring the new combination to the old C) 2 D) The question cannot be answered without more information.
Economics
According to the J curve, the rapid depreciation in the dollar from 1985 to 1987 caused net exports to
A) rise in the short run and fall in the long run. B) rise in the short run and rise further in the long run. C) fall in the short run and rise in the long run. D) fall in the short run and fall further in the long run.
Economics