If the government were to increase its spending, it would expect:
A. aggregate supply to shift to the right.
B. aggregate demand to shift to the right.
C. aggregate supply to shift to the left.
D. aggregate demand to shift to the left.
Answer: B
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The reason that the government offers inventors exclusive rights to their product for a period of time is to
A) promote innovation. B) increase profits of certain companies. C) maximize consumer utility. D) reduce market concentration.
Net exports equal imports minus exports
a. True b. False Indicate whether the statement is true or false
Markets allocate resources efficiently when Adam Smith's "invisible hand" is allowed to work freely. Which of the following statements is true?
a. Unrestrained, competitive markets can accomplish optimal resource allocation through the invisible hand - the competitive price system. b. Mandatory controls that lower prices below equilibrium improve economic welfare by making the product cheaper and promote the efficient use of resources. c. The "visible hand" of government planners provides transparency to markets and thus improves outcomes. d. Increased competition from medical travel, domestic or international, does harm to patients who do not have the ability to travel for care. e. Government regulation is essential for market outcomes to maximize consumer welfare.
Real interest rates at times have been negative. Why would anyone lending money agree to a negative real interest rate?
What will be an ideal response?