If the demand for money is insensitive to the interest rate, then the most effective expansionary policy would be
A. fiscal policy.
B. monetary policy.
C. neither fiscal nor monetary policy.
D. both fiscal and monetary policy.
Answer: B
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Increased government spending is an example of:
A. expansionary fiscal policy. B. contractionary fiscal policy. C. expansionary monetary policy. D. contractionary monetary policy.
The largest component of consumption expenditures is: a. durables
b. nondurables. c. services. d. residential structures.
When an economy experiences long-run growth there will be:
A. An increase in potential GDP. B. An increase in the use of existing productive capacity. C. A shift in aggregate supply to the left. D. A commitment to expansionary fiscal policy.
There are currently N identical firms in a market. If it is a perfectly competitive market, the short-run market supply curve at any given price is
A) N times the supply of an individual firm. B) N - 1 times the supply of an individual firm. C) N plus the supply of an individual firm. D) It cannot be determined from the information provided.