A reduction in the reserve deposit ratio, ?, will most likely have which of the following effects?
A) a rightward shift in the IS curve
B) a leftward shift in the IS curve
C) an upward shift in the LM curve
D) a downward shift in the LM curve
D
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Assume that the government decides to use fiscal or monetary policy to stimulate the economy and that this action comes as a surprise to most individuals and businesses. In the short run, the result will be
A) an increase in aggregate demand and a fall in the price level. B) a decrease in aggregated demand and a rise in the price level. C) a decrease in the average duration of unemployment and a decrease in the unemployment rate. D) an increase in the average duration of unemployment and an increase in the unemployment rate.
If the Fed decides to sell T-bills, it increases the supply of T-bills. How will this affect the price of T-bills and the interest rate?
A. T-bill prices fall and interest rates fall. B. T-bill prices rise and interest rates rise. C. T-bill prices rise and interest rates fall. D. T-bill prices fall and interest rates rise.
If a government policy change harms a monopolist, the government could
A) tax those who get additional gains and compensate the monopolist, thereby making the change a Pareto improvement. B) increase the general tax rate and compensate the monopolist, thereby making the change a Pareto improvement. C) do nothing, because the change is a Pareto improvement. D) It is not possible to mitigate the harm to a monopolist.
If in 2003, $100 billion of consumption goods in Canada are produced but remain unsold and Canadian retail stores discover they have more inventory than they want, those $100 billion of consumption goods, by default, become
a. consumption goods in the form of next year's inventories b. intended investment in the form of next year's inventories c. investment goods in the form of next year's inventories d. consumption goods in the form of unwanted inventories e. investment goods in the form of unwanted inventories