Scarcity is determined by the existence of bad alternatives.
a. true
b. false
Ans: b. false
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With a large and growing deficit, the Fed may face pressure from the government to
A) decrease the inflation tax. B) decrease the quantity of money to keep the value of money high. C) keep interest rates low, but the Fed risks inflation by doing so. D) increase the velocity of circulation. E) increase the quantity of money to prevent inflation.
A rise in the real interest rate r
a. creates income and substitution effects that reduce C0. b. creates income effects that reduce C0, substitution effects that increase C0. c. creates income effects that increase C0, substitution effects that reduce C0. d. creates income and substitution effects that increase C0.
A probable outcome of a decrease in aggregate demand and the subsequent cutback in production is
a. frictional unemployment b. cyclical unemployment c. cost-push unemployment d. structural unemployment e. transitory unemployment
Injections:
a) Decrease aggregate demand b) Always equal savings c) Always equal national income d) Include investment and export spending