If the quantity of money supplied ________ the quantity demanded, in the long run the value of money ________
A) is less than; does not change unless the Fed increases the money supply
B) exceeds; falls as people spend their surplus money
C) is less than; falls as people spend their surplus money
D) exceeds; rises as people buy bonds
E) equals; equals zero
B
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Some economists argue that the short-run Phillips curve is not vertical, and that monetary policy can be effective in the short run. Which one of the following is not one of the reasons for this skepticism?
A) Wages and prices may not adjust rapidly enough to keep the short-run Phillips curve vertical. B) Individuals may not be able to use information of Fed Policy to make a reliable forecast of inflation. C) Empirical evidence shows workers and firms have rational expectations. D) Contracts with workers and suppliers may hinder firms' abilities to adjust to price changes.
Suppose an individual inverse demand curve is given as P = 2 - 1/2 qi, where qi is the quantity demanded by individual i. There are 50 individual consumers with this identical, individual inverse demand curve. Solve for the market demand curve
What will be an ideal response?