New classical macroeconomic theory emphasizes the role of "sticky" prices in the economy
Indicate whether the statement is true or false
FALSE
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In which of the following cases would the supply of loanable funds curve shift rightward?
A) Investment demand increases. B) The stock market booms, so people's wealth increases. C) In June, Sally learns that at year's end she will receive a bonus that will double her current salary. D) The economy moves into a recession. E) Joe is worried about cutbacks at his firm, so his expected future income falls.
What is the difference between retained earnings and dividends?
What will be an ideal response?
Suppose output is $35 billion, government purchases are $10 billion, desired consumption is $15 billion, and net exports are $4 billion. Then desired investment equals
A) $2 billion. B) $4 billion. C) $6 billion. D) $8 billion.
In the monetarist view, if the money supply has been rising too quickly for years, the resulting inflation can be brought under control by slowing money growth. This will
a. quickly reduce inflation with no side effects. b. quickly reduce inflation with higher unemployment. c. increase unemployment depending upon how quickly the public changes their expected price level. d. slowly reduce inflation with higher unemployment. e. both c and d.