In the short-run macro model, a decrease in the money supply will

a. lower the interest rate, increase spending, and increase GDP
b. lower the interest rate, reduce spending, and lower GDP
c. raise the interest rate, increase spending, and increase GDP
d. raise the interest rate, reduce spending, and lower GDP
e. raise the interest rate, reduce spending, and increase GDP


D

Economics

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Which of the following statements regarding the efficiency of monopolistic competition is FALSE?

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The classical economists believe that prices and wages quickly adjust to keep the economy operating at full employment

a. True b. False Indicate whether the statement is true or false

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Which of the following is a definition of the real interest rate in a world with a positive inflation rate?

a. The percentage increase in the borrower's purchasing power from taking a loan b. The percentage decrease in the borrower's dollars from taking a loan c. The percentage increase in the lender's purchasing power from making a loan d. The percentage increase in the lender's dollars from making a loan e. The percentage decrease in the lender's dollars from making a loan

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Use the following graph to answer the next question. The economy is at equilibrium at point C, which is below potential output. What fiscal policy would increase real GDP?

A. Shift aggregate demand to the right by increasing government purchases. B. Shift aggregate demand to the right by increasing taxes. C. Shift aggregate demand to the left by decreasing government purchases. D. Shift aggregate demand to the left by decreasing taxes.

Economics