If the U.S. government increases its expenditures (without any change in taxes) and at the same time the Federal Reserve Bank increases the money supply, the AD curve would:
A. become steeper.
B. shift to the left.
C. become flatter.
D. shift to the right.
Answer: D
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Starting from long-run equilibrium, an increase in autonomous consumption results in ________ output in the short run and ________ output in the long run.
A. higher; higher B. higher; potential C. lower; higher D. lower; potential
Answer the following statements true (T) or false (F)
1. If a firm cannot make a profit under conditions of perfect competition, it should shut down as soon as possible. 2. Allocative efficiency occurs when firms are producing the goods consumers most want and consumers pay a price equal to marginal cost. 3. Consumer surplus is the area above the demand curve and below the equilibrium price. 4. Producer surplus is the difference between the price the firm is willing to sell its goods and the price it actually receives.
An example of an explicit cost of production is: a. the cost of foregone labor earnings for an entrepreneur
b. the cost of flour for a baker. c. the foregone rent that could have been earned if land owned by a firm was not used as its parking lot. d. provided by none of the above.
Why did President Roosevelt declare a bank holiday in March 1933?