Which of the following is not generally considered to be a major cure for insolvency?
a. Equity infusions.
b. Expansionary monetary policies.
c. Financial restructuring.
d. New management strategies.
e. Asset liquidations.
.B
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The above table has the demand and supply schedules for money. Real GDP increases and, as a result, the demand for money increases by $0.1 trillion at each level of the nominal interest rate. The new equilibrium interest rate is
A) 5 percent. B) 2 percent. C) 10 percent. D) 3 percent. E) 7 percent.
Income elasticity of demand describes how change in income affects the quantity demanded of a good.
Answer the following statement true (T) or false (F)
If no fiscal policy changes are made, suppose the current aggregate demand curve will increase horizontally (shift rightward) by $1,000 billion and cause inflation. If the marginal propensity to consume is 0.90, federal policymakers could follow Keynesian economics and restrain inflation by decreasing:
a. government spending by $100 billion. b. taxes by $100 billion. c. taxes by $1,000 billion. d. government spending by $1,000 billion.
Under classical theory, wages and prices are assumed to be relatively flexible both upward and downward. Hence, the short-run aggregate supply curve returns relatively quickly to a position of long-run equilibrium
a. True b. False Indicate whether the statement is true or false