The quantity theory of money tells us that real money balances are proportional to income, since ________
A) velocity is assumed constant in the short run
B) the supply and demand of money are equal in equilibrium
C) changes in the quantity of money lead to proportional changes in the price level
D) all of the above
E) none of the above
D
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If a government provides substantial benefits to the unemployed while they look for work, it reduces the ______ of being unemployed.
Fill in the blank(s) with the appropriate word(s).
The ________ cost to society of producing an additional unit of a good or service is the marginal social cost.
A. private B. total C. subsidized D. damage
In the figure above, the shift in the supply of loanable funds curve from SLF1 to SLF2 could be the result of
A) an increase in expected rate of profit. B) a decrease in disposable income. C) an increase in expected future disposable income. D) an increase in the real interest rate. E) a decrease in wealth
Suppose the government wants to increase the price of a specific agricultural product. Discuss the welfare effects of four possible policies: price floor, price support, production quota and voluntary production reduction. Which policy is least efficient? Discuss the differences in the benefits to farmers and the cost to the government.
What will be an ideal response?