The interest rate will fall when the:
A. Quantity of money demanded exceeds the quantity of money supplied
B. Quantity of money supplied exceeds the quantity of money demanded
C. Demand for money increases
D. Supply of money decreases
B. Quantity of money supplied exceeds the quantity of money demanded
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Monetarists and classical economists think very much alike, certainly when compared to Keynesians. For example, they both assume that the
a. velocity of money is constant b. changes in money supply changes GDP c. economy operates at full employment d. price level is constant e. interest rate has no impact on investment
Recall the Application about how cable TV providers respond to the threat of potential competitors to answer the following question(s).Recall the Application. Because cable TV had to fend off potential entrants into their markets, cable TV providers are considered ________ as long as they successfully deterred entry.
A. insecure monopolists B. duopolists C. perfect competitors D. monopolistic competitors
Which of the following statements is correct?
A. Monetarists believe that the economy is inherently unstable. B. Monetarists believe that policy activism is one of the principal causes of economic instability. C. Although monetarists are basically non-interventionist, they are in favor of activist monetary policy. D. Monetarists argue that changes in M1 affect GDP only through changes in interest rates.
Starting from long-run equilibrium, an increase in autonomous consumption results in ________ output in the short run and ________ output in the long run.
A. higher; higher B. higher; potential C. lower; higher D. lower; potential