When the quantity of money supplied equals the quantity of money demanded, then
A) the goods market is in equilibrium.
B) the asset market is in equilibrium.
C) the money market is in equilibrium.
D) the money market is not in equilibrium.
B
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Suppose GDP is $10 billion, consumption expenditure is $7 billion, investment is $2 billion, and government expenditure on goods and services is $2 billion. Net exports of goods and services must be
A) $1 billion. B) -$2 billion. C) -$1 billion. D) $2 billion. E) $10 billion.
When Jamie purchases a classic 1968 Plymouth Cuda convertible from Shane, GDP
A) does not change, because the car was not produced this year. B) increases, because the car is a durable good and increases consumption. C) increases, because the car is a durable good and increases investment. D) does not change, because Jamie did not buy the car from a dealershi
The government wants to increase its spending by $1 billion to stimulate the economy and is counting on the government spending multiplier to help. Taking into account direct expenditure offset effects, what is its best spending option?
A) a new cruise missile for the military B) expanding the school lunch program C) constructing more low income housing D) providing textbooks for college students
Suppose that the absolute price elasticity for cookies equals 0.9. We could then say that the demand for cookies is
A) elastic. B) inelastic. C) unit-elastic. D) perfectly elastic.