If the central bank targets the money stock, then a negative shock to money demand will
a. shift the LM schedule to the right and income will rise above the target level.
b. shift the LM schedule up and income will fall below the target level.
c. not shift the LM schedule and, therefore, will not displace income from the target level.
d. None of the above
A
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When money is used to purchase goods and services, it serves as a:
A. medium of exchange. B. double coincidence of wants. C. store of value. D. unit of account.
The period of 1973 to 1980 can best be described as a time of
a. deflation. b. reflation. c. unflation. d. stagflation. e. disflation.
Refer to Figure 23.1. If the market price equaled $10, in the short run this firm should
A. Produce where the ATC is at a minimum. B. Shut down. C. Produce with an economic loss. D. Raise the price.
An incumbent's threat to retaliate after a potential competitor enters the market will be taken seriously by potential competitors if
A) the incumbent can still earn a profit after carrying out the threat. B) the incumbent earns greater profit carrying out the threat than by accommodating entry. C) the potential entrant cannot earn a profit if the threat is carried out. D) the potential entrant's profit exceeds the incumbent's if the threat is carried out.