You and a Friend Are Arguing Over the Issue of the Nonneutrality

question 84

Multiple Choice

You and a friend are arguing over the issue of the nonneutrality of money.You believe that money is not neutral,and to prove your point you would cite all of the following except

• A)large gold discoveries that increased the money supply preceded an economic boom.
• B)a change in monetary institutions preceded a boom or recession.
• C)a change in the leadership of the Fed and its policy was followed by noticeable changes in the money supply and a recession or inflation.
• D)the fact that every recession was preceded by a drop in the money supply.

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Definitions:

Indifference Curve

A graph that shows a combination of two goods that give a consumer equal satisfaction and utility, representing their preferences.

Equal Satisfaction

A principle in consumer choice theory that suggests consumers allocate their resources to maximize satisfaction or utility.

Indifference

A state where a consumer has no preference between two or more choices.

Utility

An economic term referring to the total satisfaction received from consuming a good or service.