The liquidity trap ________.
A. makes contractionary monetary policy less effective
B. makes expansionary monetary policy less effective
C. makes expansionary fiscal policy less effective
D. makes contractionary fiscal policy less effective
Answer: B
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Use the IS—LM model to determine the effects of each of the following on the general equilibrium values of the real wage, employment, output, the real interest rate, consumption, investment, and the price level
(a) Tougher immigration laws reduce the working-age population. (b) There's increased volatility in the prices of stocks and bonds. (c) The government tries to achieve tax equity by an increase in the corporate tax rate. (d) Increased computerization reduces stock market brokerage costs.
If this is an open economy, quantity supplied of cars by the domestic producers will be ________.
A. 20,000 B. 80,000 C. 60,000 D. 40,000
If a natural disaster were to cause a negative long-run supply shock to the economy, once the economy adjusts, the new equilibrium will be at a:
A. higher price level and lower level of output. B. lower price level and lower level of output. C. higher price level and higher level of output. D. lower price level and higher level of output.
Refer to the information provided in Figure 2.5 below to answer the question(s) that follow.
Figure 2.5Refer to Figure 2.5. For this economy to move from Point A to Point B, ________ additional OLED TVs could be produced when the production of LCD TVs is reduced by 30.
A. exactly 20 B. more than 20 C. fewer than 20 D. exactly 90