A decrease in the supply of money will lead to a(n)
A) increase in equilibrium real GDP and an increase in the equilibrium interest rate.
B) increase in equilibrium real GDP and a decrease in the equilibrium interest rate.
C) decrease in equilibrium real GDP and an increase in the equilibrium interest rate.
D) decrease in equilibrium real GDP and a decrease in the equilibrium interest rate.
Ans: C) decrease in equilibrium real GDP and an increase in the equilibrium interest rate.
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The marginal social benefit (MSB) of abatement represents
a. the additional gains to society from reducing pollution b. the reduction in damages from abatement c. society's demand for abatement or environmental quality d. all of the above
Under which exchange rate system was a dollar redeemable for gold only if the dollar was presented by a foreign central bank?
A) a fiat system B) the gold standard C) a managed float exchange rate system D) the Bretton Woods System
Which of the following is an example of microeconomic analysis?
a. impact of taxation on national income b. rate of increase in the national debt c. relationship between inflation and interest rates set by the Federal Reserve d. none of the above
The agricultural price support program in the United States has resulted in:
A. Declining average farm income B. Surpluses of price-supported farm commodities C. Shortages of price-supported farm commodities D. A gradual migration of people from farms to cities