The liquidity-preference model was first introduced in:
A. 2008 by Ben Bernanke.
B. 1776 by Adam Smith.
C. 1936 by John Maynard Keynes.
D. 1970 by John Kenneth Galbraith.
Answer: C
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The real interest rate, business taxes, expected profits and business confidence, and capacity utilization are embedded in the slope of the investment function
Indicate whether the statement is true or false
During the 2007-2009 financial crisis the excess reserve ratio
A) increased sharply. B) decreased sharply. C) increased slightly. D) decreased slightly.
Classical economists argue that all workers could have been employed during the Great Depression if they had been willing to accept falling wages
But President Hoover and his supporters recommended that hours be cut before wages which increased unemployment. Indicate whether the statement is true or false
Suppose the market demand for milk is Qd = 150 - 5P. Additionally, suppose that a dairy's variable costs are VC = 2Q2 (where Q is the number of gallons of milk produced each day), its marginal cost is MC = 4Q and there is an avoidable fixed cost of $50 per day. In the long run there is free entry into the market. Suppose the demand for milk doubles. How many total active firms are in the market in the long run due to the increased demand?
A. 10 B. 20 C. 100 D. 2