When the Fed raises the federal funds rate, eventually there is
A) an upward movement along the investment demand curve and the aggregate demand curve shifts leftward.
B) an upward movement along the investment demand curve and the aggregate demand curve shifts rightward.
C) a leftward shift of the investment demand curve and the aggregate demand curve shifts leftward.
D) an upward movement along the investment demand curve and along the aggregate demand curve.
E) a leftward shift of both the aggregate demand curve and the aggregate supply curve.
A
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If the demand for a product decreases and the supply of the same product decreases, the equilibrium price will decrease
Indicate whether the statement is true or false
Claude's Copper Clappers sells clappers for $40 each in a perfectly competitive market. At its present rate of output, Claude's marginal cost is $39, average variable cost is $45, and average total cost is $60 . To improve his profit/loss situation, Claude should
a. increase output b. reduce output but not to zero c. maintain the present rate of output d. shut down e. raise the price
Monetarists differ from traditional classical theorists in their belief that
a. velocity is not constant b. the only motive for demanding money is the transactions demand c. investment is very sensitive to changes in the interest rate d. the economy operates at full-employment e. increases in the money supply do not lead to changes in real GDP
The fact that a higher standard of living tomorrow can only be achieved by sacrificing consumption today is an example of the:
A. principle of increasing opportunity costs. B. scarcity principle. C. equilibrium principle. D. principle of comparative advantage.