Which of the following statements is correct? Other things equal:
A. a decline in real output will shift both the transactions demand curve for money and the
total money demand curve to the right.
B. a decline in the interest rate will shift the asset demand curve for money to the right but
leave the total money demand curve unchanged.
C. deflation will shift both the transactions demand curve for money and the total money
demand curve to the left.
D. inflation will shift the transactions demand curve for money to the right but leave the total
money demand curve unchanged.
C. deflation will shift both the transactions demand curve for money and the total money
demand curve to the left
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The Fed seeks to promote stability of financial markets because
A) resources are lost when there is not an efficient matching of savers and borrowers. B) they want to lift the self-esteem of workers. C) unstable markets result in increased efficiency. D) Congress directed them to do so by the Employment Act of 1946.
Which of the following is NOT a characteristic of long-run equilibrium for a perfectly competitive firm?
A. The firm produces the output level at which long-run average cost is at its minimum. B. Economic profit is zero. C. Price is greater than long-run average cost. D. Price is equal to long-run marginal cost.
What is the price of a TV in an open economy with a quota?
A. $100 B. $75 C. $150 D. $125
The sum of the marginal propensity to consume (MPC) and the marginal propensity to save (MPS) always equals:
A. 1. B. 0. C. the interest rate. D. the marginal propensity to invest (MPI).