If the Fed pursues a contractionary monetary policy on the open market, which of the following would be the most likely result?
a. appreciation of the dollar
b. increase in exports
c. decrease in imports
d. lower interest rates
a. appreciation of the dollar
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A supply curve shows quantities supplied at various prices. It also shows the
A) total profit the firm earns at a given level of output. B) marginal benefit of the good. C) total cost of production. D) marginal cost of production. E) producer surplus, which is equal to the slope of the supply curve.
Bart consumes food and clothing, which are both normal goods. Suppose that the price of food falls. The substitution effect of this price decrease is ________ and the income effect of this price decrease is ________
A) that Bart buys more clothing and less food; that Bart buys more of both food and clothing B) reflected by a change in the relative prices of food and clothing; is represented by a movement along the original indifference curve C) reflected by a parallel shift outward of the budget line; that Bart earns more money each month D) reflected by the change in the slope of the budget line; that Bart has greater purchasing power
The speculative demand for money:
a. varies inversely with income. b. is only concerned with active money. c. involves holding money for unexpected problems. d. varies directly with the transactions demand for money. e. varies inversely with the interest rate.
An increase in the price level will increase the interest rate, which will decrease investment spending and shift aggregate demand to the left
a. True b. False