A decrease in interest rates caused by a change in the price level would cause a(n) ________.
A. increase (or shift right) in aggregate demand
B. decrease in the quantity of real output demanded (or movement up along AD)
C. increase in the quantity of real output demanded (or movement down along AD)
D. decrease (or shift left) in aggregate demand
Answer: C
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What would you expect the market value to be for a four year bond that has a face value of 10,000 and a coupon return of $2000 when the market interest rate is 6%?
A) $14,851.15 B) $6,930.21 C) $13,742.22 D) $18,000.00
Determine the output expansion path (equation) for a Cobb-Douglas production function f(L,K) = 10LaK1-a. How does the shape of the output expansion path change as "a" changes?
What will be an ideal response?
In an economy in which real output grows at an average rate of 3 percent per year, a 7 percent average rate of growth in the money supply would result in a(n): a. inflation rate of 4 percent, if velocity of money in circulation is constant. b. inflation rate of -4 percent, if velocity of money in circulation is constant. c. $7 increase in the price level each year
d. $7 decrease in the price level each year. e. increase in the velocity of money in circulation.
The labor supply curve represents: a. the relationship between the wage rate and labor productivity
b. the tradeoff between labor and leisure. c. the relationship between the wage rate and the quantity supplied of labor. d. the tradeoff between labor and capital as alternative factors of production.