In the above figure, if we start at AD1 and SRAS1, and the money supply increases unexpectedly, what would be the short-run equilibrium even with rational expectations?
A. E3
B. P1
C. E2
D. E1
Answer: C
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What is productive efficiency?
A) a situation in which firms produce as much as possible B) a situation in which resources are allocated such the last unit of output produced provides a marginal benefit to consumers equal to the marginal cost of producing it C) a situation in which resources are allocated such that goods can be produced at their lowest possible average cost D) a situation in which resources are allocated to their highest profit use
Given the bank reserve-holding ratio e and the quantity of bank deposits D, the demand by banks for high-powered money is
A) eD. B) e/D. C) D/e. D) e + D. E) D - e.
A company in Panama pays for a U.S. architect to design a factory building. By itself this transaction
a. increases U.S. exports and so increases the U.S. trade balance. b. increases U.S. exports and so decreases the U.S. trade balance. c. increases U.S. imports and so increases the U.S. trade balance. d. increases U.S. imports and so decreases the U.S. trade balance.
Which of the following equations represents the saving schedule implicit in the given data?
Answer the question on the basis of the following data:
A. S = C - Y d .
B. S = 40 + .4Y d .
C. S = 40 + .6Y d .
D. S = -40 + .4Y d .