A decrease in the discount rate will:
A. decrease the money supply.
B. not affect the money supply.
C. increase the money supply.
D. have an unclear effect on the money supply.
Answer: C
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The current market price for good X is below the equilibrium price, and then the demand curve for X shifts rightward. What is the likely outcome of the demand shift?
A) The surplus increases. B) The surplus decreases. C) The shortage increases. D) The shortage decreases.
An increase in taxes
a. raises aggregate expenditure by raising national income, thereby increasing consumption b. raises aggregate expenditure by raising national income, thereby decreasing consumption c. lowers aggregate expenditure by lowering national income, thereby increasing consumption d. lowers aggregate expenditure by decreasing consumption, thereby lowering national income e. has no effect on aggregate expenditure
Which of the following happens in the market for loanable funds when there is capital flight?
a. the demand curve shifts right. b. the demand curve shifts left. c. the supply curve shifts right. d. the supply curve shifts left.
In which case, if any, will inflation remain higher after a temporary adverse supply shock?
a. both when the central bank maintains a higher money supply growth rate and when the central bank does nothing b. only if the central bank does nothing c. only if the central bank maintains a higher money supply growth rate d. None of the above is correct. Whether the central bank maintains a higher money supply growth rate or not, the inflation rate will return to its original level.