Criteria for an optimum currency area include all the following except
A) fiscal transfers.
B) similar business cycle patterns.
C) extensive trade with each other.
D) a common language.
D
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A sustained change in the monetary growth rate will
A) immediately affect equilibrium real money balances by raising the money interest rate. B) eventually affect equilibrium nominal money balances by raising the money interest rate. C) eventually affect equilibrium real money balances by reducing the money interest rate. D) eventually affect equilibrium real money balances by raising the real interest rate. E) eventually affect equilibrium real money balances by raising the money interest rate.
Economic regulation of business is justified if, by intervening, government can
a. improve the allocation of resources in society b. create economic rents for special interest groups c. reduce output and increase prices for an industry d. increase tax revenue from the regulated industry e. force firms to increase their costs of production