Other things the same, as the price level rises,
a. the interest rate rises causing aggregate demand to shift.
b. the interest rate rises causing a movement along a given aggregate-demand curve.
c. the interest rate falls causing aggregate demand to shift.
d. the interest rate falls causing a movement along a given aggregate-demand curve.
b
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One reason why firms replace markets for some activities is that firms
A) reduce the number of transactions required. B) enable individuals to avoid a large portion of their taxes. C) reduce the rate at which the product is wasted. D) do not require team production.
All of the following have enhanced the Fed's credibility in conducting monetary policy except
A) discontinuing the policy of announcing whether it considered the economy to be at greater risk of inflation or recession following each FOMC meeting. B) making the minutes of the open market committee meetings public. C) following through with changes it has announced. D) revealing the Fed's target for the federal funds rate.
Suppose current government spending decreases and that individuals expect future government spending to decrease. Given this information, in which of the following cases will output in the current period be more likely to decrease?
A) Individuals consider only the short run effects of changes in future macro variables when forming expectations of future output and future interest rates. B) Individuals consider only the medium run effects of changes in future macro variables when forming expectations of future output and future interest rates. C) Individuals consider only the long run effects of changes in future macro variables when forming expectations of future output and future interest rates. D) The output effects will be the same in B and C.
According to your text, the total annual social cost of regulation (federal, state and local) in the United States is estimated to exceed ________ per year.
A. $500 million B. $900 million C. $50 billion D. $1 trillion