Assume the multiplier is 5 and that the crowding-out effect is $30 billion. An increase in government purchases of $20 billion will shift the aggregate-demand curve to the
a. right by $130 billion.
b. right by $70 billion.
c. right by $50 billion.
d. right by $10 billion.
b
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Refer to the table above. If the rental price of machines is $40 per day, up to how many machines should the firm rent to maximize profits?
A) 2 B) 4 C) 6 D) 7
Explain the moral hazard that automobile insurance companies face. What methods do they employ to try to mitigate this problem? Explain carefully
What will be an ideal response?
If Tom wants to not be hit, what strategy could he follow
a. Threaten to not tell b. Always not tell c. Threaten to tell d. All of the above
If the monetary authorities want to lower the size of the monetary multiplier, they should
A. lower the legal reserve ratio. B. raise the legal reserve ratio. C. take actions to increase bank reserves. D. take none of these actions.