The constant growth rate rule for money, as initially proposed by Milton Friedman, has been adjusted ________
A) to take the problem of moral hazard in account
B) to account for the role played by adaptive expectations in policy formation
C) for the difference between real and nominal economic variables
D) to allow for possible short-run movements in velocity
D
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Higher ________ in Canada than in the United States help(s) explain why ________ unemployment is higher in Canada than in the United States
A) prices; frictional B) unemployment benefits; structural C) unemployment benefits; frictional D) investment; structural E) prices; structural
The chapter shows that as a general rule people with more education earn higher salaries. Economists have offered two explanations of this relationship
The human capital argument says that high schools and colleges teach people valuable skills and employers are willing to pay higher salaries to attract people with those skills. The signaling argument says that college graduates earn more because a college degree is a signal to employers that a job applicant is diligent, intelligent, and persevering. How might you use data on people with two, three, and four years of college education to shed light on this controversy?