Suppose that there is a positive shock to investment demand: that is, at every interest rate, the desired amount of investment rises. In a closed economy with the national saving fixed, the real interest rate will:
A. fall.
B. remain constant.
C. rise.
D. first fall and then rise.
Ans: C. rise.
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A person who voluntarily quits his/her job in New York and expects to get a similar job in Los Angeles is an example of:
a. structural unemployment. b. cyclical unemployment. c. durational unemployment. d. frictional unemployment.
Although monopoly has lower output than competition, the level of output is efficient
a. True b. False Indicate whether the statement is true or false
If the price of inputs rises and foreign income rises:
a. Aggregate demand and aggregate supply rise. b. Aggregate demand and aggregate supply fall. c. Neither aggregate demand nor aggregate supply change. d. Aggregate demand rises, and aggregate supply falls. e. None of the above.
Which of the following is NOT a fiscal policy action?
A. decreasing government spending on social welfare B. lowering income tax rates C. increasing government expenditures on military hardware D. decreasing the quantity of money in circulation