According to Keynes, the impact of an increase in the money supply is
A. a lower interest rate and a smaller growth in real GDP.
B. a higher interest rate and a smaller growth in real GDP.
C. a higher interest rate and a larger growth in real GDP.
D. a lower interest rate and a larger growth in real GDP.
Answer: D
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Based on the figure below. Starting from long-run equilibrium at point C, a tax increase that decreases aggregate demand from AD1 to AD will lead to a short-run equilibrium at point ________ and eventually to a long-run equilibrium at point ________, if left to self-correcting tendencies.
A. D; C B. D; B C. A; B D. B; C
Which of the following would most likely induce the Federal Reserve to conduct expansionary monetary policy? A significant decrease in
A) business taxes. B) income tax rates. C) oil prices. D) investment spending.
One reason why, in the last four decades, the number of new auto makers in the world has been very small compared to the past is that
A) governments restrict who can produce automobiles. B) new auto makers cannot obtain necessary inputs to produce new cars. C) new producers cannot match the economies of scale of existing auto makers. D) the automobile cannot be improved upon in any way by new producers.
Geri purchases a newly constructed house built by a private contractor. Her spending on the house is included in GDP as a part of
a. personal consumption expenditures. b. depreciation. c. gross private investment. d. personal saving.