Which of the following is true about the Taylor principle?
A) it explains the link between higher inflation and higher real interest rates
B) it is the foundation for an upward sloping MP curve
C) it reflects the practice of monetary policy
D) all of the above
E) none of the above
D
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According to a study of the U.S. demand for alcoholic beverages, the price elasticity of demand for beer is -0.30. Which of the following could explain why the price elasticity of demand for beer is low?
A) More and more people are switching to wine and cocktails rather than beer. B) Beer is an inferior alcoholic beverage. C) There are only a few major suppliers of beer. D) The price of beer is relatively low and for many people it is a habit forming product.
Economics examines the options open to households and business firms, but ignores the options of governments and entire societies
a. True b. False Indicate whether the statement is true or false