According to the misperceptions theory, if the Fed wanted to use monetary policy to influence the real economy it would have to
A) increase the money supply whenever the economy was in a recession.
B) decrease the money supply whenever the economy was in an inflationary boom.
C) surprise the public with unexpected changes in monetary policy.
D) abide by the monetary targets it announced.
C
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Tina Eckstrom and her husband bought a deferred annuity in 1954 that started paying them $700 a month in retirement benefits in 1994 . During the 40 years period, the price level rose 3.2 percent per year. Since 1994, the price level has risen 3.0 percent per year. They, along with millions of other people who live on fixed incomes, are examples of
a. those who are responsible for inflation b. people who gain from inflation c. people who lose from inflation d. the paradox of thrift e. underemployed persons
Profit is constant along an isoquant.
Answer the following statement true (T) or false (F)