The money supply decreased and the AD curve shifted to the left. This is consistent with the
A) Keynesian transmission mechanism when there is neither a liquidity trap nor interest-insensitive investment.
B) monetarist transmission mechanism.
C) Keynesian transmission mechanism when there is a liquidity trap.
D) Keynesian transmission mechanism with interest-insensitive investment.
E) a and b
E
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The total amount of consumption of a society can be increased if
A. firms allow each worker to perform multiple tasks. B. resources are allocated by a central planning group. C. individuals engage in specialization and voluntary trade. D. barter exchange is used in place of money.
A decrease in the discount rate ________ bank reserves and ________ the money supply if banks respond appropriately to the change in the rate.
A) increases; increases B) increases; decreases C) decreases; increases D) decreases; decreases
Refer to the figure above. How many units of Good Y will be supplied if the market is free?
A) 9 million B) 16 million C) 13 million D) 20 million
If interest rates in Mexico decrease while the interest rates in the United States remain unchanged then
A) the supply of Mexican pesos will increase. B) the supply of Mexican pesos will decrease. C) the supply of U.S. dollars will increase. D) None of the above answers is correct.