An increase in the real interest rate will cause an increase in ________
A) saving
B) planned investment
C) net exports
D) all of the above
E) none of the above
A
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Figure 9.1 shows three aggregate demand curves. A movement from curve AD0 to curve AD1 could be caused by a(n)
A) decrease in government spending. B) decrease in the money supply. C) decrease in the price level. D) decrease in taxes.
Which of the following statements is true?
A) Economics is concerned with money, not choices. B) Economics can be used to predict people's actions. C) Economics does not provide insights into human behavior. D) Economic reasoning tends to reduce the quality of decision making.
M2 does not include
A) Treasury bonds. B) passbook savings accounts. C) small-denomination time deposits. D) M1.
According to rational expectations theory,
a. there is absolutely nothing government can do, even in the short run, to reduce the economy's unemployment rate. b. the government can use fiscal policy such as increased government spending or lower tax rates to reduce unemployment. c. a modern extension of Keynesian economics exists. d. discretionary fiscal policy is essential for prolonged growth. e. market participants can be fooled in the long run by monetary and fiscal policy rules.