This topic contains a solution. Click here to go to the answer

Author Question: A government policymaker suggests Double the money supply and U.S. citizens' real incomes will ... (Read 105 times)

crobinson2013

  • Hero Member
  • *****
  • Posts: 535
A government policymaker suggests Double the money supply and U.S. citizens' real incomes will double. In the long run, is this policy advice correct?
 
  What will be an ideal response?

Question 2

A distinction between stocks and bonds is that
 
  A) although the return on a bond is determined by the forces of supply and demand, the return on a stock is set by the stock exchange.
  B) stocks represent ownership claims to the company and bonds do not.
  C) bonds must be held for a fixed number of years whereas stocks can be bought and sold at any time.
  D) bonds can be traded many times in the bond market, while stocks are non-transferable.
  E) bonds cannot be sold to anyone other than the company that issued it while stocks can be resold to anyone.



Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

coyin

  • Sr. Member
  • ****
  • Posts: 334
Answer to Question 1

This statement is incorrect because in the long run an increase in the quantity of money increases only the price level. Indeed, it increases the price level by the same percentage. So if the Fed followed the advice and increased the quantity of money by 100 percent (which doubles it), then in the long run the only effect is to increase the price level by 100 percent.

Answer to Question 2

B




crobinson2013

  • Member
  • Posts: 535
Reply 2 on: Jun 29, 2018
Wow, this really help


lcapri7

  • Member
  • Posts: 350
Reply 3 on: Yesterday
YES! Correct, THANKS for helping me on my review

 

Did you know?

Colchicine is a highly poisonous alkaloid originally extracted from a type of saffron plant that is used mainly to treat gout.

Did you know?

Chronic necrotizing aspergillosis has a slowly progressive process that, unlike invasive aspergillosis, does not spread to other organ systems or the blood vessels. It most often affects middle-aged and elderly individuals, spreading to surrounding tissue in the lungs. The disease often does not respond to conventionally successful treatments, and requires individualized therapies in order to keep it from becoming life-threatening.

Did you know?

The first war in which wide-scale use of anesthetics occurred was the Civil War, and 80% of all wounds were in the extremities.

Did you know?

Warfarin was developed as a consequence of the study of a strange bleeding disorder that suddenly occurred in cattle on the northern prairies of the United States in the early 1900s.

Did you know?

It is difficult to obtain enough calcium without consuming milk or other dairy foods.

For a complete list of videos, visit our video library