Which of the following would cause investment spending to decrease and aggregate demand to shift left?
a. a decrease in the money supply and an investment tax credit.
b. the repeal of an investment tax credit and an increase in the money supply.
c. a decrease in the money supply and the repeal of an investment tax credit.
d. an investment tax credit and an increase in the money supply.
c
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Diminishing returns, so that each additional hour of labor employed produces successively smaller additional amounts of real GDP, exist because
A) additional workers are paid higher wage rates. B) labor is not very productive. C) extra labor produces more output. D) all other factors are held fixed. E) the price level rises as more workers are employed.
Suppose your payroll check is directly deposited to your checking account. Everything else held constant, total reserves in the banking system ________ and the monetary base ________
A) remain unchanged; remains unchanged B) remain unchanged; increases C) decrease; increases D) decrease; decreases
The relative decline in goods production compared to services produced means that we're producing fewer goods than in earlier decades.
Answer the following statement true (T) or false (F)
Related to the Economics in Practice on page 102: Frank runs a corner delicatessen and one day decides to raise his prices by 10 percent. Total revenue is likely to ________ at the end of the first month of the higher prices since demand is relatively elastic in the ________ term.
A. rise; short B. rise; long C. fall; long D. fall; short