In the figure above, one factor NOT responsible for the decline in the demand for money is
A) a decline the price level.
B) a decline in income.
C) an increase in income.
D) a decline in the expected inflation rate.
C
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Suppose the money demand of individuals and firms depends on what they perceive to be the probabilities that the economy will expand or contract over the following six months
Suppose their money demand is given by the equation L = 0.5Y - 100i + 20z, where z is the probability that the economy is expanding six months in the future. If z = 1, the economy will certainly be in recovery, if z = 0, the economy will certainly be in recession, and for z between 0 and 1 there is some uncertainty about the future state of the economy. Use a classical (RBC) model of the economy. If the Fed moves the money supply to target the price level, how does the money supply relate to the expected future state of the economy? Is this an example of reverse causation?
The formula for an infinite sum is:
A. 1 + b + b2 + b3 + b4 + ... = 1 / b. B. 1 + b + b2 + b3 + b4 + ... = 1 / (1 + b). C. 1 + b + b2 + b3 + b4 + ... = 1 / (1 - b). D. 1 + b + b2 + b3 + b4 + ... = b / (1 - b).
If a country's working-age population increases and its wealth increases, then the labor supply curve
A. shifts to the right. B. shifts to the right if the effect of the change in wealth is bigger than the effect of the change in the working-age population. C. shifts to the left if the effect of the change in wealth is bigger than the effect of the change in the working-age population. D. shifts to the left.
Common resource is another term for public good.
Answer the following statement true (T) or false (F)