The investment curve is ________ of (on) the level of national income and ___________ as the interest rate falls
a. independent; quantity demanded of investment decreases
b. dependent; quantity demanded of investment increases
c. independent; quantity demanded of investment increases
d. dependent; quantity demanded of investment remains unchanged
e. dependent; investment curve shifts from horizontal to upward sloping
C
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Some economists object to having the Fed concentrate solely on price stability because it would
A) make stabilizing the economy more difficult. B) lessen its credibility. C) privatize the Federal Reserve. D) free the Fed from political pressure.
Typically, as an economy begins to emerge from a recessionary phase of the business cycle
A) investment begins to fall. B) inflation begins to fall. C) unemployment falls immediately. D) unemployment continues to rise.
If a government policy change harms a monopolist, the government could
A) tax those who get additional gains and compensate the monopolist, thereby making the change a Pareto improvement. B) increase the general tax rate and compensate the monopolist, thereby making the change a Pareto improvement. C) do nothing, because the change is a Pareto improvement. D) It is not possible to mitigate the harm to a monopolist.
Given the slope of the aggregate demand curve, real GDP demanded will decrease when
a. real income rises. b. real income falls. c. the price level falls. d. the price level rises.