The traditional monetary rule is the idea that:
A. the annual rate of increase in the money supply should be equal to the potential annual growth rate of real GDP.
B. the annual rate of increase in the money supply should be equal to the long-term increase
in the price level.
C. an expansionary fiscal policy should always be accompanied by an easy monetary policy.
D. monetary policy only affects the economy 6 to 9 months after the money supply is changed.
A. the annual rate of increase in the money supply should be equal to the potential annual growth rate of real GDP.
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Strategic complementarities may help explain business cycles because such complementarities may lead to
A) decreasing returns to scale. B) constant returns to scale. C) increasing returns to scale. D) a downward-sloping labor supply curve.
Which of the following would be classified as a liability for a bank?
a. Required reserves. b. Excess reserves. c. Loans. d. Checkable deposits.