If there is a dollar-for-dollar direct expenditure offset, then
A) increases in aggregate demand will also increase long-run aggregate supply.
B) increases in government spending will not increase aggregate demand.
C) increases in aggregate demand will increase the price level, but leave real output unchanged.
D) increases in aggregate demand will increase real output, but leave the price level unchanged.
B
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Refer to Scenario 12.1 At the assumed annual inflation rate of 5 percent, approximately how much will the $6.00 pack of cigarettes cost in 10 years, when Jennifer reaches the age of 35?
A) $8 B) $10 C) $16 D) $23
Keynes hypothesized that the transactions component of money demand was primarily determined by the level of
A) interest rates. B) velocity. C) income. D) stock market prices.
If a policy is Pareto optimal:
A. it will hurt no one. B. some of the losses will exceed the gains. C. it will hurt more than 50 percent of the population. D. it will hurt less than 50 percent of the population.
Refer to Figure 18.2. A decrease in the discount rate would most likely result in
A. A decrease in the money supply and a move from AS2 to AS1. B. A decrease in the money supply and a move from AD2 to AD1. C. An increase in the money supply and a move from AD1 to AD2. D. An increase in the money supply and a move from AS1 to AS2.