An increase in the money supply will tend to
A. lower interest rates and lower the equilibrium GDP.
B. lower interest rates and increase the equilibrium GDP.
C. increase interest rates and increase the equilibrium GDP.
D. increase interest rates and lower the equilibrium GDP.
B. lower interest rates and increase the equilibrium GDP.
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How does a sterilized intervention by the Fed in foreign exchange market differ from an unsterilized intervention?
What will be an ideal response?
An improvement in managerial efficiency in a Fortune 500 corporation increases the marginal revenue product of all people working for the corporation. Assuming that the wage of workers who are hired in a competitive labor market remains constant, the company will
A. fire some workers. B. hire some workers. C. neither increase nor decrease the number of workers employed. D. shut down unless it can lower wages.
An estimation technique that begins with an initial approximation, which is then modified in accordance with additional information, is known as:
A. the representative heuristic. B. status quo bias. C. regression to the mean. D. anchoring and adjustment.
A key difference between functional finance and sound finance is that in the functional finance approach, the government has the potential for:
A. a less active role in spending and taxing decisions. B. more active role in spending and taxing but only during depressions. C. no role since functional finance holds that on moral principle the budget should be balanced. D. a more active role in spending and taxing decisions.