In the Keynesian cross diagram, an increase in autonomous consumer expenditure causes the aggregate demand function to shift ________, the equilibrium level of aggregate output to rise, and the IS curve to shift to the ________,
everything else held constant.
A) up; left
B) up; right
C) down; left
D) down; right
B
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If there are 48 million people in a country's labor force, and the number of potential adult workers in the country is 80 million, the labor force participation rate in the economy is:
A) 90 percent. B) 60 percent. C) 48 percent. D) 80 percent.
Which of the following increases the equilibrium price of a used car and decreases the equilibrium quantity?
A) an announcement by the U.S. Attorney General that the windows on older cars were made with cheaper glass that can explode at high speeds B) new federal legislation that raises the legal driving age to twenty-four in all states C) a new fee that used car dealers must pay to the government on all sales of used cars D) all of the above because each is consistent with the "law of demand"
The main difference between a repo and federal funds transaction is that
A) the repo transaction uses the securities for collateral while the federal funds transaction does not have collateral. B) the federal funds transaction uses securities for collateral while the repo transaction does not have collateral. C) the repo transaction has an agreed upon interest rate while the federal funds transaction has a spread between the sale and purchase price of securities. D) the federal funds transaction is normally overnight while the typical repo agreement is for 90 to 180 days.
If a monopoly can produce a good at zero marginal cost, then its Lerner Index is
A) zero. B) one. C) infinity. D) undetermined.