Assume (other things constant) that the Fed increases the money supply. The mechanism through which aggregate demand increases is, according to interest-rate-based transmission mechanism, summarized as follows:
A) the money supply increases ? there is a drop in money balances held ? interest rates increase ? planned investment spending decreases ? aggregate demand increases.
B) increase in money supply ? increase in money balances held ? decrease in interest rates ? decrease in planned investment spending ? increase in aggregate demand.
C) increase in money supply ? decrease in money balances held ? decrease in interest rates ? increase in planned investment spending ? increase in aggregate demand.
D) increase in money supply ? decrease in interest rates ? increase in planned investment spending ? increase in aggregate demand.
D
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The "rational expectations revolution" refers to a substantial change in the thinking of ________
A) households and businesses B) policy makers C) macroeconomists D) elected officials
The argument first used to protect the U.S. steel industry from foreign competition over a century ago was the
a. diversity of industries argument b. antidumping argument c. national security argument d. retaliation argument e. infant industries argument
Define the terms "production" and "production function." Differentiate between the short run and the long run based on the usage of inputs by a firm
What will be an ideal response?
A market with two sellers is called a:
A. monopoly. B. perfectly competitive market. C. duopoly. D. biopoly.