When a commercial bank lends $1000 to a customer
A) M1 and M2 decline by $1000.
B) M1 and M2 rise by $1000.
C) M1 rises but M2 does not change.
D) there is no change in M1 or M2 until the loan proceeds are spent.
B
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What is the relationship between aggregate planned expenditure and real GDP at equilibrium expenditure?
What will be an ideal response?
The public choice model assumes that government policymakers
A) must promote the public interest at the expense of their own self-interests in order to be re-elected. B) will pursue their self-interests in personal affairs but only if it does not conflict with the public interest. C) are likely to pursue their own self-interests, even if their self-interests conflict with the public interest. D) will often act irrationally in their personal affairs, but will act rationally when they promote the public interest.
The U.S. work week has declined from 60 hours in 1890 to 40 hours today. The impact of the decline in working hours
A) increases U.S. GDP and increases the well-being of a typical working person in the U.S. B) increases U.S. GDP and decreases the well-being of a typical working person in the U.S. C) decreases U.S. GDP and decreases the well-being of a typical working person in the U.S. D) decreases U.S. GDP and increases the well-being of a typical working person in the U.S.
If butter is a substitute for margarine, then an increase in the price of butter would be most likely to cause:
a. a rightward shift of demand for margarine. b. a leftward shift of demand for margarine. c. the quantity demanded for margarine to increase. d. the quantity demanded for margarine to decline. e. a decline in the price of margarine.