An increase in the real interest rate will
a. lead to an increase in the expected inflation rate.
b. increase the real cost of purchasing goods and services in the current period relative to future periods.
c. encourage borrowers to demand a larger quantity of funds.
d. reduce the quantity of funds supplied to the loanable funds market.
B
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Suppose the Fed buys $1 billion worth of bonds and the required reserve ratio is 10%. In the theoretical limit, the money supply could
A) decrease by $1 billion. B) increase by $1 billion. C) decrease by $10 billion. D) increase by $10 billion.
If a firm decreases output when MR > MC, then:
a. profit will equal zero. b. profit will increase. c. profit will decrease. d. profit will remain the same. e. the firm is minimizing losses.
Other things the same, an increase in the amount of capital firms wish to purchase would initially shift
a. aggregate demand right. b. aggregate demand left. c. aggregate supply right. d. aggregate supply left.
The long run is defined as:
A. the horizon in which there are both fixed and variable factors of production. B. the horizon in which the manager can adjust all factors of production. C. the horizon in which there are only fixed factors of production. D. greater than one year.