Which of the following best describes the cause-and-effect chain of a restrictive monetary policy?
A. A decrease in the money supply will lower the interest rate, increase investment spending, and increase aggregate demand and GDP.
B. An increase in the money supply will raise the interest rate, decrease investment spending, and decrease aggregate demand and GDP.
C. An increase in the money supply will lower the interest rate, decrease investment spending, and increase aggregate demand and GDP.
D. A decrease in the money supply will raise the interest rate, decrease investment spending, and decrease aggregate demand and GDP.
Answer: D
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If an industry currently has a Herfindahl index of 900 and a merger would raise that to 950, then the Department of Justice would generally
a. challenge the merger because the index would become too large b. challenge the merger because the change in the index is too large c. not challenge the merger because the postmerger index is less than 1,800 d. not challenge the merger if it is a horizontal merger e. challenge the merger if it is a vertical merger
A decline in interest rates tends to expand the economy by depreciating the currency and raising net exports.
Answer the following statement true (T) or false (F)
An increase in the price of a product and an increase in the number of sellers in the market affect the supply curve in the same general way
a. True b. False Indicate whether the statement is true or false
If the price level rises to $120 trillion, what is the best estimate for RGDP demanded?
a. $12 trillion
b. $14 trillion
c. $16 trillion
d. $18 trillion