In the chain of cause and effect involving monetary policy:
a. An increase in the money supply will decrease the rate of interest
b. An increase in interest rates will increase the money supply
c. A decrease in the rate of interest will decrease aggregate demand
d. A decrease in aggregate demand will increase output and employment
a. An increase in the money supply will decrease the rate of interest
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Based on the figure below. Starting from long-run equilibrium at point C, a decrease in government spending that decreases aggregate demand from AD1 to AD will lead to a short-run equilibrium at__ creating _____gap.
A. B; no output B. D; an expansionary C. B; recessionary D. D; a recessionary
Along the short-run Phillips curve SRPC0 the natural unemployment rate is
A) 7 percent. B) 3 percent. C) 6 percent. D) an amount that can be determined from the figure, but none of the above answers is correct. E) an amount that cannot be determined from the figure. The figure above shows some Phillips curves for an economy.
Government policies can affect the supply of a good by: a. affecting the level of output of the good
b. affecting the cost of production of the good. c. affecting the nature of demand in the economy. d. affecting the income of the consumers.
The legal system is an example of:
A. human capital. B. social capital. C. entrepreneurial capital. D. physical capital.