According to the interest-rate-based monetary policy transmission mechanism, an increase in the money supply generates
A) increased spending on consumer goods and services directly, which causes an increase in aggregate demand.
B) an increase in aggregate supply since the supply of money is part of aggregate supply.
C) lower interest rates, which causes an increase in planned real investment spending and an increase in aggregate demand.
D) an increase in nominal GDP and a change in the price level, but no change in real GDP.
C
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Starting from long-run equilibrium, a large tax increase will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. recessionary; lower; potential B. expansionary; lower; potential C. expansionary; higher; potential D. recessionary; lower; lower
Refer to Figure 18-1. Area B + C represents
A) the portion of sales tax revenue borne by consumers. B) the portion of sales tax revenue borne by producers. C) the excess burden of the sales tax. D) sales tax revenue collected by the government.
The figure below shows a firm that has two plants. Plant 1 has a marginal cost curve of mc1, plant 2 has a marginal cost curve of mc2, and the overall marginal cost curve is MC. When the managers maximize profit, the marginal cost in plant 1 is ________ and the marginal cost in plant 2 is ________ .
A) $160; $150
B) $80 per unit; $80 per unit
C) $120; $100
D) None of the above answers is correct.
Who or what did Edwards Deming blame for the problems in American manufacturing?
A. Tariffs B. Steel prices C. The system D. The workers