An increase in money demand will shift the
A) IS curve to the left.
B) IS curve to the right.
C) LM curve to the left.
D) LM curve to the right.
C
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Harry Truman is credited with the statement, “Give me a one-armed economist,” because economists are likely to say, “On the one hand, . . . on the other hand.” Why do economists “waffle” more than physicists or chemists?
What will be an ideal response?
If the Fed ________ the money supply, the user cost of capital will ________ and V* will ________
A) increases; increase; increase B) increases; decrease; increase C) decreases; decrease; decrease D) decreases; decrease; increase
Two events occur simultaneously in the market for automobiles: (1) an improvement in assembly line technology and (2) the economy enters a recession (which decreases consumers' income). An economist would predict with certainty that
a. equilibrium quantity will rise b. equilibrium quantity will fall c. equilibrium price will rise d. equilibrium price will fall e. the equilibrium price will remain the same
According to the circular-flow diagram GDP
a. can be computed as the total income paid by firms or as expenditures on final goods and services. b. can be computed as the total income paid by firms, but not as expenditures on final goods and services. c. can be computed as expenditures on final goods and services, but not as the total income paid by firms. d. cannot be computed as either total income paid by firms or expenditures on final goods and services.