Author Question: Proponents of the monetary growth rule believe that a constant growth rate in the money supply will ... (Read 80 times)

fagboi · **on:** Jun 30, 2018

Proponents of the monetary growth rule believe that a constant growth rate in the money supply will lead to less uncertainty and greater credibility than with activist policies.
a. True
b. False
Indicate whether the statement is true or false

Question 2

How does the deadweight loss occur in a deficiency payment program?

emilymalinowski12 · **Reply #1 on:** Jun 30, 2018

Answer to Question 1

True

Answer to Question 2

The deadweight loss occurs because the program increases the output beyond the efficient level of output. From the efficient level of output to the new level of output, the marginal cost to sellers for producing the good is greater than the marginal benefit to consumers.