When the money supply declines by 10%, in the short run (before the price level adjusts to restore general equilibrium), output ________ and the price level ________.
A. falls; is unchanged
B. is unchanged; falls
C. is unchanged; is unchanged
D. falls; falls
Answer: A
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Define expected utility
What will be an ideal response?
Estimations of demand are used as input in this type of scenario:
A. understanding automobile demand to decide whether to offer below-market-rate loans for new cars. B. as input into a firm's decision-making process. C. understanding the demand for oil in order to impose a new oil import tax. D. all of the above
To find an economy's long-run equilibrium price level, locate the point where ________ and ________ cross and look to the left.
A. demand; supply B. aggregate demand; price level C. aggregate demand; short-run aggregate supply D. long-run aggregate supply; aggregate demand
If government expenditure on goods and services increase by $10 billion, then aggregate demand
A) increases by $10 billion. B) increases by $10 billion multiplied by the government expenditure multiplier. C) decreases by $10 billion multiplied by the government expenditure multiplier. D) decreases by $10 billion. E) increases by $10 billion multiplied by the tax multiplier.