Which of the following factors may lead to a decline in the real value of money?
a. Increase in the rate of interest
b. Decline in aggregate demand in the economy
c. Decrease in money supply
d. Increase in the average price level
e. Decrease in aggregate output
d
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Which of the following is NOT one of the eight basic puzzles about financial structure?
A) Debt contracts are typically extremely complicated legal documents that place substantial restrictions on the behavior of the borrower. B) Indirect finance, which involves the activities of financial intermediaries, is many times more important than direct finance, in which businesses raise funds directly from lenders in financial markets. C) Collateral is a prevalent feature of debt contracts for both households and business. D) There is very little regulation of the financial system.
Which of the following would be considered an example of structural policy?
A. Provision of additional cash to the banking system. B. A reduction in income tax rates. C. An attempt to reduce the government budget deficit by reducing spending. D. A decision by a developing country to reduce government control of the economy and to become more market-oriented.
Statistics show that the less developed a country is
A. the larger is the per capita income. B. the larger is the share of industrial output in its total output. C. the larger is the GDP. D. the larger is the share of agricultural output in its total output.
An increase in the price of water ski boats is likely to
A. decrease the demand for water skis. B. increase the demand for water skis. C. decrease the demand for water ski boats. D. increase the demand for water ski boats.