From any point below the current LM curve, money market equilibrium can be restored by some combination of a ________ income and a ________ interest rate that ________ the demand for money
A) higher, higher, increases
B) higher, lower, increases
C) higher, lower, reduces
D) lower, higher, increases
E) lower, higher, reduces
E
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All of the following are true statements about the multiplier except
A) The formula for the multiplier overstates the real world multiplier when we take into account the impact of changes in GDP on imports, inflation and the interest rate. B) The larger the MPC, the larger the multiplier. C) The multiplier is the ratio of the change in real GDP to the change in autonomous expenditure. D) The multiplier makes the economy less sensitive to changes in autonomous expenditure.
Microeconomics and macroeconomics are closely intertwined
a. True b. False Indicate whether the statement is true or false
An economist observes that a pharmaceutical company is sponsoring a diabetes clinic and providing free medications. She concludes that the pharmaceutical company is reducing short-term profits for the possibility of higher long-term profits. This economist is most likely a(n):
A. irrational economist. B. behavioral economist. C. traditional economist. D. engineering economist.
Suppose that the United States and Italy both produce wine and shoes. In the United States, wine sells for $10 a bottle and shoes sell for $40 a pair. In Italy, wine sells for 15 euros a bottle and shoes sell for 20 euros a pair. If the current exchange rate is 0.8 euro to the dollar, then
A. the United States will import both shoes and wine from Italy. B. Italy will import both shoes and wine from the United States. C. the United States will import shoes from Italy and Italy will import wine from the United States. D. the United States will import wine from Italy and Italy will import shoes from the United States.