Exhibit 20-6 Money, investment and product markets
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In Exhibit 20-6, if the Fed believes the economy is at AD3, how might it engineer a decline in the price level?
A. By decreasing the money supply, the interest rate falls, investment rises, and aggregate demand falls, causing the price level to fall.
B. By decreasing the money supply, the interest rate rises, investment rises, and aggregate demand rises, causing the price level to fall.
C. By decreasing the money supply, the interest rate rises, investment falls, and aggregate demand falls, causing the price level to fall.
D. By increasing the money supply, the interest rate rises, investment rises, and aggregate demand falls, causing the price level to fall.
Answer: C
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The ________ the down payment made by a borrower when taking out a mortgage, the ________
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All of the following are true regarding managerial diseconomies except which one?
A) They cause an increase in a firm's total profit. B) They can increase as a firm adds more plants. C) They can increase as a firm expands its scope of operations. D) They affect a firm's total profit.
If the exchange rate rises, domestic goods become relatively ______ expensive. This change in the affordability of domestic goods makes domestic goods _____ attractive to foreigners. So, _______ ______
Fill in the blank(s) with correct word