In a simplified banking system subject to a 25 percent required reserve ratio, a $1,000 open-market purchase by the Fed would cause the money supply to:
a. increase by $1,000 b. decrease by $1,000.
c. decrease by $4,000 d. increase by $4,000.
d
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If the public believes the commitment to a nominal anchor to be credible, the effect of a negative aggregate demand shock is for ________
A) short-run aggregate supply to shift up B) short-run aggregate supply to be unaffected C) short-run aggregate supply to shift down D) inflation, but not economic activity, to decrease
If the cheeseburger costs $2, how many cheeseburgers would you buy
a. 1 b. 2 c. 3 d. 4
If the price of inputs rises and personal income taxes rise:
a. Aggregate demand falls and aggregate supply rises. b. Aggregate demand rises and aggregate supply rises. c. Aggregate demand falls and aggregate supply falls. d. Neither the aggregate demand nor the aggregate supply change. e. None of the above.
An excess burden is present when taxpayers alter their behavior on account of taxation.
Answer the following statement true (T) or false (F)