If the Federal Reserve decides to decrease the money supply, which of the following most likely will occur?

(A) An increase in private investment and consumer expenditure
(B) A decrease in private investment and consumer expenditure
(C) An increase in private investment and a decrease in consumer expenditure
(D) A decrease in private investment and an increase in consumer expenditure


Ans: (B) A decrease in private investment and consumer expenditure

Economics

You might also like to view...

In general, as individuals undertake additional years of schooling,

A) their stock of human capital increases.
B) the marginal productivity of individuals as workers declines.
C) the marginal benefit to society of the extra years of education increases.
D) the marginal productivity of individuals as workers becomes negative.

Economics

The figure above shows the labor market in a small town. If the government imposes ________ that firms must at least pay, the effect will be ________ because ________

A) a minimum wage of $10; an increase in unemployment; a surplus of labor is created B) a minimum wage of $10; no change in unemployment; it will not affect how firms demand labor C) a minimum wage of $10; a decrease in unemployment; a shortage of labor is created D) an efficiency wage of $10; an increase in unemployment; a shortage of labor is created E) an efficiency wage of $10; a decrease in unemployment; a surplus of labor is created

Economics

A bubble is best defined as

a. an increase in the price of an asset resulting from fundamentals causes. b. an increase in the price of an asset resulting from factors other than fundamentals causes. c. a decrease in the price of an asset resulting from fundamentals causes. d. a decrease in the price of an asset resulting from factors other than fundamentals causes.

Economics

Suppose a firm uses both labor (L) and capital (K) and its long-run production function is given by the expression Q = F(L,K) = L2 × ?(L + 2K). The firm currently uses 100 units of capital. Assuming labor is finely divisible, graph the firm's short-run production function for the first five workers.

What will be an ideal response?

Economics