The economic system in which the basic economic questions are answered through markets with some government intervention is a:
A. command economy.
B. mixed economy.
C. market economy.
D. planned economy.
Answer: B
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The Keynesian cause-and-effect sequence predicts that an increase in the money supply will cause interest rates to:
a. fall, boosting investment and shifting the AD curve rightward, leading to an increase in real GDP. b. fall, boosting investment and shifting the AD curve rightward, leading to a decrease in real GDP. c. rise, cutting investment and shifting the AD curve rightward, leading to an increase in real GDP. d. rise, boosting investment and shifting the AD curve rightward, leading to an increase in real GDP. e. fall, cutting investment and shifting the AD curve leftward, leading to a decrease in real GDP.
If the Fed buys a T-bill from a commercial bank, how will it pay for the T-bill?
a. It will give the bank new reserves. b. It will write the bank a check. c. It will transfer cash to the bank's vault. d. It will take reserves from another bank.
The optimal level of pollution reduction is that level at which
A. the total benefits of pollution reduction exceeds the total cost of pollution reduction by the largest amount. B. the total benefits of pollution reduction equal the total cost of pollution reduction. C. the marginal benefit of pollution reduction exceeds the marginal cost of pollution reduction by the largest amount. D. the additional benefit of the last unit of pollution reduction equals the additional cost of the last unit of pollution reduction. E. both a and d
A decrease in aggregate demand will cause
A. prices to fall and unemployment to increase according to both classical economists and Keynes. B. aggregate supply to fall according to Keynes, and unemployment to increase according to classical economists. C. prices to fall according to classical economists, and unemployment to increase according to Keynes. D. aggregate supply to fall according to classical economists, and prices to fall according to Keynes.