If the Federal Reserve "pegs" the interest rate, then in the IS-LM framework, the LM schedule
a. is vertical.
b. becomes horizontal.
c. slopes upward to the right.
d. slopes downward and the left.
B
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The velocity of circulation is defined as the
A) average number of times in a year that each dollar is used to buy goods and services. B) price level obtained when the money market is at its equilibrium. C) quantity of money demanded at equilibrium. D) speed with which changes in the interest rate spread throughout the economy. E) quantity of money supplied by the Fed.
A real flow in the circular flow diagram is
i. a firm's payments of wages to its workers. ii. a household's purchase of a new car. iii. a farmer's use of land to grow corn. A) ii and iii B) i only C) i and iii D) ii only E) i, ii and iii
Unlike national income, personal income
a. includes retained earnings, indirect business taxes, corporate income taxes and social insurance contributions, and excludes interest and transfer payments received by households from the government. b. excludes retained earnings, indirect business taxes corporate income taxes, social insurance contributions and interest and transfer payments received by households from the government. c. excludes retained earnings, indirect business taxes, corporate income taxes and social insurance contributions, and includes interest and transfer payments received by households from the government. d. includes retained earnings, indirect business taxes, corporate income taxes, social insurance contributions, and interest and transfer payments received by households from the government.
Which of the following may shift the labor supply curve?
A. an increase in the corporate tax rate B. a decrease in the value people place on their time C. an increase in the price of the output of the firm D. an increase in worker productivity