An increase in aggregate demand, such as that due to an increase in government purchases, increases:
a. prices in the short run and output in the long.
b. output in the short run and prices in the long run.
c. both output and prices in the long run.
d. output in the long run.
Ans: b. output in the short run and prices in the long run.
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In the figure above, with no government involvement and if the colleges are competitive, how many students are enrolled?
A) 8 million per year B) 12 million per year C) 10 million per year D) 4 million per year
The command of World War II (1941–45)
(a) was more structured than that of World War I (1914–18) (WWI). (b) experienced the same unconstitutionality problems experienced during WWI. (c) was distinct from WWI in most ways. (d) did not involve rationing of goods and services, given the high unemployment of the period.
According to the Net Present Value (NPV) rule, managers choose to invest if
a. The NPV of the project is less than zero b. The NPV of the project is greater than zero c. The NPV of the project is equal to zero d. The NPV of the project is equal to the cost of capital
If the Federal Reserve sets a target nominal interest rate, it can:
A. only set a money supply target that is consistent with the nominal interest rate target. B. shift the money demand curve to the right. C. achieve this target with any arbitrary supply of money. D. independently set a target money supply.