In the above figure, a movement from point A to point B represents
A) a decrease in the quantity of money demanded.
B) a decrease in the demand for money that might be the result of a fall in the price level.
C) an increase in the quantity of money demanded.
D) an increase in the demand for money that might be the result of an increase in real GDP.
E) an increase in the demand for money that might be the result of a fall in the price level.
C
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Starting from long-run equilibrium, a large tax increase will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. recessionary; lower; potential B. expansionary; lower; potential C. expansionary; higher; potential D. recessionary; lower; lower
According to the law of demand, the quantity demanded of a good is related to
A) the average price of all goods. B) income. C) any factor that affects the decision of an individual consumer but not the market. D) the relative price of that good.
Many nations are consistently accused of enjoying the benefits of membership in the United Nations, yet they provide few or no funds to support the organization. This is an example of
A) the principle of rival consumption. B) the free-rider problem. C) the negative externality problem. D) the property rights problem.
If a nation has a current account deficit and it does not have to make any inpayments or outpayments of official reserves, it must have a:
A. surplus in its capital and financial account. B. balance of payments deficit. C. balance of payments surplus. D. deficit in its capital and financial account.