When the Fed unexpectedly increases the money supply, it will cause an increase in aggregate demand because
a. real interest rates will fall, stimulating business investment and consumer purchases.
b. the dollar will appreciate on the foreign exchange market, leading to a decrease in net exports.
c. lower interest rates will tend to decrease asset prices (for example, stock prices), which decreases wealth and, thereby, decreases current consumption.
d. the general level of prices will fall, which will increase the disposable income of households.
A
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The above figure depicts the market for video games. If the government imposed a $3 per game tax on sellers, what would be the new equilibrium price paid by consumers after the tax?
A) less than $27 per game B) $27 per game C) more than $27 per game. D) More information is needed to determine if the price is more than, less than, or equal to $27 per game.
Which of the following is used to illustrate an independent relationship between two variables?
a. An upward-sloping curve b. A downward-sloping curve c. A hill-shaped curve d. A horizontal or vertical line
To internalize a negative externality: a. a producer's costs could be reduced by an amount equal to the external cost resulting from the production of a good. b. a producer's costs could be increased by an amount equal to the external cost resulting from the production of a good. c. a producer could receive a subsidy equal to the external cost resulting from the production of a good
d. None of the above are correct.
Large swings in stock prices are usually caused by
A. A decrease in interest rates. B. An increase in dividend payments by corporations. C. Widespread changes in expectations. D. A decrease in the supply of stocks.