Which of the Following Is False

question 35

Multiple Choice

Which of the following is false?

• A) Economists who advocate discretionary monetary policy argue that it is more likely to achieve the desired economic results because the monetary authority has the flexibility to shape the best monetary policy to the existing circumstances.
• B) Here is an example of zero crowding out: The government spends $100 more and the private sector doesn't spend any less.
• C) Here is an example of complete crowding out: The government spends $100 more and the private sector spends $100 less.
• D) Not all economists believe that rule-based monetary policy is preferable to discretionary monetary policy.
• E) none of the above

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Definitions:

Fixed Expenses

Costs that do not fluctuate with the volume of business or level of activity within a short period.

Breakeven Point

When the expenses and the revenue are equal, so that there is no profit or loss.

Expense Function

A mathematical expression that describes how costs change with variations in the volume of activity.

Expense Functions

Mathematical formulas used to describe the relationship between expenses and other variables such as production or sales volume.