At low levels of employment, the Keynesian aggregate supply curve
a. is downward sloping
b. is upward sloping
c. is vertical
d. is horizontal
e. is zero
D
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With a vertical LM curve, an increase in the money supply can be matched by an equal increase in money demand only through ________, which causes monetary policy to be particularly ________
A) a rise in income, strong B) a rise in income, weak C) a fall in the interest rate, strong D) a fall in the interest rate, weak
When referring to "marginal" changes, the economic focus is on:
A. changes which affect only a few people or products. B. large changes on the low end. C. graduated changes on the high end. D. small or incremental changes.
In the figure above, how can the economy represented by the production possibilities frontier move from point C to point F?
A) Increase the available amount of resources. B) Increase the level of technology. C) Redistribute the existing resources to produce more apples and fewer oranges. D) First move to point B and then move to point F.
Is each of the following situations an example of savings, investment, or neither? In each case explain your choice
(a) A savings and loan association lends money for the purchase of "junk" (not backed) bonds. (b) John's income is $25,000 per year; $22,000 is spent on consumer goods and the remaining money is used purchase stock in the local electric company. (c) Just before retirement a couple sells their shares of Pacific Bell stock and puts the proceeds in a bank savings account. (d) The city of Los Angeles rebuilds highways after an earthquake. (e) In order to improve the income earning potential of current welfare recipients, the federal government increases the size of income transfers.