In the long run
A. all inputs are variable.
B. all intermediate goods are fixed.
C. only capital inputs are fixed.
D. all inputs are fixed.
Answer: A
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If the Federal Reserve is currently paying 0.75% interest on bank reserves, but then increases that interest rate to 1%, banks may decide to hold ________ reserves, and the money supply may ________.
A. more; decrease B. more; increase C. fewer; decrease D. fewer; increase
International trade is restricted because
A) there is an uneven distribution of benefits and costs of free trade. B) free trade creates an inefficient use of resources. C) free trade leads to higher costs. D) free trade stifles diversity and stability.
The demand for labor is described as a derived demand because
A) it is derived from the demand for products that use labor in the production process. B) it is derived by workers seeking to earn income to fund the consumption of goods and services. C) it is derived from government institutions which rely on labor markets for the purpose of raising tax revenue. D) it is derived by producers seeking to make profits by starting new businesses.
Explain how an increase in government spending would affect the DD-AA schedule in the short run
What will be an ideal response?