According to the classical dichotomy, which of the following increases when the money supply increases?

a. the real interest rate
b. real GDP
c. the real wage
d. the nominal wage.


d

Economics

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Explain how our economic welfare depends upon our level of real GDP per person but there might not be a one-to-one relationship between economic welfare and real GDP per person. Give examples of things that can effect one but not the other

What will be an ideal response?

Economics

If you deposit $20,000 in cash into a demand deposit account at a bank that faces an 18 percent required reserve ratio the result will be:

a. the bank will add $3,600 to its excess reserves. b. the bank will add $16,400 to its excess reserves. c. the bank will add $16,400 to its total reserves. d. the bank will add $20,000 to its excess reserves.

Economics

Economists agree that

a. neither high inflation nor moderate inflation is very costly. b. both high and moderate inflation are quite costly. c. high inflation is costly, but they disagree about the costs of moderate inflation. d. moderate inflation is as costly as high inflation.

Economics

Consider two lottery winners, Tino who is 65 years old and Sasha who is 32 years old. Which of these two would be expected to have the larger income effect, all else equal?

A) Sasha B) Tino C) Both would have no income effect. D) Both would have equal income effects.

Economics