According to the Monetarist Theory of Macroeconomic Policy

question 13

Multiple Choice

According to the monetarist theory of macroeconomic policy:

• A) prices drop when there is too much money chasing too few goods.
• B) inflation should be avoided at all costs for the overall good of the economy.
• C) interest rates should be kept low at all times to encourage investment.
• D) a recession can result when there isn't enough money in the system.
• E) the government should avoid interfering in the free market as much as possible.

Understand historical patterns and consequences of urbanization and suburbanization in the U.S.

Recognize the causes and effects of economic recessions and depressions in U.S. history.

Identify the impact of governmental policies on U.S. economic development from the 20th century to the present.

Distinguish between periods of economic boom and bust in the U.S. history.

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Definitions:

Marginal Value

Marginal value is the additional satisfaction or utility gained from consuming one more unit of a good or service.

Price Discriminate

The practice of selling the same product to different buyers at different prices based on their willingness or ability to pay.

Demand Curves

A graphical representation showing the relationship between the price of a good and the quantity of that good consumers are willing and able to purchase, typically downward sloping.

Marginal Value

The extra benefit or pleasure derived from using or making an additional unit of a product or service.