With a vertical LM curve, an increase in the money supply can be matched by an equal increase in money demand only through ________, which causes monetary policy to be particularly ________
A) a rise in income, strong
B) a rise in income, weak
C) a fall in the interest rate, strong
D) a fall in the interest rate, weak
A
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When the government prints more money to finance debt, it is actually creating a situation that could result in
A) lowering foreign spending. B) inflation. C) increasing domestic spending. D) devaluing of the dollar in markets.
A flat-rate income tax is also called ________
A) an excise tax B) a property tax C) a proportional income tax D) a constant rate tax
All of the following are reasons for the downward-sloping aggregate demand curve except
A) as the price level decreases, the quantity demanded of real GDP decreases because goods and services are more expensive. B) as the price level increases, the real value of household wealth declines, reducing consumption. C) a higher price level increases the demand for money, causing an increase in the interest rate which reduces spending on investment goods and consumer durables. D) if the price level rises in a country relative to price levels in other countries, net exports will decrease in the original country.
Exhibit 8-3 Cost per unit curves
If the price of the firm's product in Exhibit 8-3 is $1.50 per unit, which intersects AVC at point B, the firm should:
A. continue to operate because it is earning a positive economic profit. B. stay in operation for the time being even though it is making an economic loss. C. shut down temporarily. D. increase the price.