Using the liquidity-preference model, when the Federal Reserve decreases the money supply,
a. the equilibrium interest rate increases.
b. the aggregate-demand curve shifts to the right.
c. the quantity of goods and services demanded is unchanged for a given price level.
d. the short-run aggregate-supply curve shifts to the left.
a
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What is likely to happen in a used-car market if the buyers feel that the best they can do is to buy a lemon?
A) The sellers of gems reap high profits. B) Higher gains from trade are realized. C) The entire market shuts down. D) The sellers of lemons earn high profits.
Cartels are difficult to maintain because
a. antitrust laws are difficult to enforce. b. cartel agreements are conducive to monopoly outcomes. c. there is always tension between cooperation and self-interest in a cartel. d. firms pay little attention to the decisions made by other firms.
Which of the following fiscal policy actions would be appropriate if the economy is experiencing an recessionary? gap?
A. a decrease in taxes B. an increase in interest rates C. a decrease in government spending D. a decrease in the money supply
The sale of a used automobile would not be included in GDP of the current year because it is ________.
A. not a market transaction B. not current production C. a private transfer payment D. a purely financial transaction