The foreign purchases, interest rate, and real-balances effects explain why the ________.
A. aggregate demand curve is downward-sloping
B. aggregate expenditures schedule may shift up or down
C. aggregate demand curve may shift to the left or right
D. economy will adjust towards equilibrium
Answer: A
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According to Friedman, people behave differently with respect to the different kinds of incomes they earn. For example, the MPC in 2002 is associated with their _________ income earned in 2000 . The difference between the income earned in 2001, and that income in 2002 is called ___________ income
a. relative; absolute b. absolute; relative c. permanent; transitory d. transitory; permanent e. transitory; transitory
The free-rider problem is larger for private goods than it is for public goods.
Answer the following statement true (T) or false (F)
For something to serve as money, it must be
A. backed by the authority of the government. B. generally accepted by buyers and sellers. C. convertible to gold. D. light, durable, and common.
If the Federal Reserve raises or lowers interest rates too late, it could result in a ________ policy that destabilizes the economy
A) fiscal B) budgetary C) procyclical D) countercyclical