Assume a fixed demand for money curve and the Fed increases the money supply. The result is a temporary:
a. excess quantity of money demanded.
b. excess quantity of money supplied.
c. new equilibrium interest rate.
d. decrease in the demand for loans.
b
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Refer to Figure 15-4. What is likely to happen to this monopoly in the long run?
A) It will be regulated by the government because of its excess profits. B) New firms will enter the market to eliminate its profits. C) It will expand its output to take advantage of economies of scale so as to further increase its profit. D) As long as there are entry barriers, this firm will continue to enjoy economic profits.
In economics, the meaning of demand refers to
A) how badly someone wants a good. B) the quantities of a good that people will buy at various prices. C) the quantities of a good that people will sell at various prices. D) the total satisfaction that consuming a good provides people at different prices.
The Japanese economy is stuck in a recessionary gap. The proper fiscal policy could include a(n)
a. decrease in taxes. b. increase in government purchases. c. increase in transfer payments. d. All of the above are correct.
When the money supply increases
a. interest rates fall and so aggregate demand shifts right. b. interest rates fall and so aggregate demand shifts left. c. interest rates rise and so aggregate demand shifts right. d. interest rates rise and so aggregate demand shifts left.