The invisible hand suggests that:
A) individuals working for self-interest will eventually maximize the well-being of society.
B) equilibrium in a competitive market is determined independent of demand and supply.
C) government intervention is necessary to rectify market imperfections.
D) the price mechanism allocates resources only to the people with high income in the country.
A
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A feature of Bitcoin, a new type of electronic money, that make it attractive as a medium of exchange is
A) anonymous transactions. B) volatility of value. C) heavy regulations by the central bank. D) wide acceptance by businesses.
Assume the long-term nominal interest rate is 7% and the expected inflation rate is 3%
If the Fed increases the money supply and as a result, the expected inflation rate increases to 5%, then based on the Fisher effect, the long-term real interest rate will A) remain at 4%. B) increase to 6%. C) fall to 3%. D) increase to 9%.