The figure above illustrates the effect of an increased rate of money supply growth at time period T0. From the figure, one can conclude that the
A) liquidity effect is smaller than the expected inflation effect and interest rates adjust quickly to changes in expected inflation.
B) liquidity effect is larger than the expected inflation effect and interest rates adjust quickly to changes in expected inflation.
C) liquidity effect is larger than the expected inflation effect and interest rates adjust slowly to changes in expected inflation.
D) liquidity effect is smaller than the expected inflation effect and interest rates adjust slowly to changes in expected inflation.
C
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Under a managed float,
a. currency traders "buy low and sell high" b. a central bank attempts to stabilize an exchange rate c. national governments use fiscal policy to prevent inflation d. managers allow product prices to float in response to supply and demand shifts e. governments attempt to harmonize their tax policies.
Suppose a firm uses workers and office space to produce output. The firm is locked into a year-long lease on its office space, but it can easily vary the number of employee-hours it uses each day. The accompanying table describes the relationship between the number of employee-hours the firm uses each day and the firm's daily output. Each unit of output sells for $2, the hourly wage rate is $14, and the rent on the office space is $50 per day.Employee-Hours Per DayOutput Per Day0014048091201516023200 When the firm uses 9 employee-hours per day, its total variable cost each day is:
A. $56. B. $84. C. $30. D. $126.