Use the money demand and money supply model to show graphically and briefly explain the effect on the interest rate if real GDP increases
What will be an ideal response?
The increase in real GDP shifts the money demand curve to the right from MD1 to MD2, raising the interest rate from 4% to 5%.
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Economic costs of production differ from accounting costs in that
A) economic costs include expenditures for hired resources while accounting costs do not. B) accounting costs are always larger than economic cost. C) accounting costs include expenditures for hired resources while economic costs do not. D) economic costs add the opportunity costs of a firm using its own resources while accounting costs do not.
Table 24.1Monopoly Costs and RevenueQuantityPriceTotal Cost1$500$4002$450$6503$400$9504$350$1,3005$300$1,700In Table 24.1, according to the profit maximization rule, at the profit-maximizing level of output, total revenue is
A. $950. B. $650. C. $900. D. $1,200.
Which of the following statements is true?
A. Short-run economic fluctuations are made worse because prices are flexible B. Short-run economic fluctuations would be less severe if prices were inflexible C. If prices were fully inflexible, there would be no short-run economic fluctuations D. If prices were fully flexible, there would be no short-run economic fluctuations
Which of the following activities would occur in a resource market?
a. Reesa buys a new computer to help balance her personal checkbook. b. Randy pays a speeding ticket. c. Ian mows his grass. d. Pam buys a ticket to the ball game. e. General Motors hires additional workers to run a third shift at its Flint, Michigan, factory.