Speculative demand for money is a(n):
A. positive function of prices.
B. inverse function of prices.
C. positive function of interest rates.
D. inverse function of interest rates.
Answer: D
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When Brady is driving he throws his cigarette butts out the window, reasoning that other people will clean up the litter on the side of the road. By throwing his cigarette butts out the window, Brady is:
A. creating a positive externality for himself. B. helping to achieve the socially optimal level of litter. C. imposing an external cost on others. D. treating his private property as common property.
An increase in fixed costs will lower a firm's
a. total cost. b. output. c. prices. d. profit.
If the money supply in the economy were at MS2, and the Federal Reserve Bank used open market operations to move money supply to MS1 the overall result in the economy would be:
A. Aggregate demand shifted in, causing GDP to fall.
B. Aggregate supply shifted in, causing GDP to fall.
C. Aggregate demand shifted out, causing GDP to rise
D. LRAS move to the FE level of output.
Most modern economic analysis is normative in nature, but involves questions with positive aspects.
Answer the following statement true (T) or false (F)