When there is a liquidity trap, when the Fed adds bank reserves, there is a large effect on borrowing, investment and aggregate demand
a. True
b. False
Indicate whether the statement is true or false
False
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Refer to the above table. If the price is $6 the maximum profit this firm could earn is
A) $210. B) $414. C) $420. D) $630.
When a freely functioning market is in disequilibrium:
a. the government must set a price ceiling. b. the government must set a price floor. c. the price and quantities demanded and/or supplied change until equilibrium is established. d. it will continue to remain in disequilibrium. e. it will reach equilibrium at a very high/low price.
Refer to the given table.Price Per UnitColumn A Units Per YearColumn B Units Per Year$4011040$459550$508060$556570$605080 Suppose the columns in this table reflect demand and supply. If the current market price is $50, then you would expect:
A. demand to decrease and supply to decrease. B. supply to decrease. C. the market price to fall. D. the market price to rise.
All other things unchanged, why does an increase in money demand cause the aggregate demand curve will shift to the left?
A) Because the resulting increase in bond prices reduces consumption spending. B) Because the resulting decrease in bond interest rate will lead to an increase in the quantity of investment and net exports. C) Because the resulting higher interest rate will lead to a lower quantity of investment and net exports. D) Because the resulting lower interest rate will lead to lower net exports.