The so-called wealth effect will result in households:
A. Spending more and saving less
B. Spending less and saving more
C. Spending less and saving less
D. Spending more and saving more
A. Spending more and saving less
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For a perfectly competitive syrup producer whose average total cost curve does not change, an economic profit could turn into an economic loss if the
A) market demand for syrup decreases. B) marginal cost curve shifts downward. C) market demand for syrup does not change. D) market demand for syrup increases. E) price of syrup rises.
Classical economists believe that
A) money is neutral. B) an increase in the real money supply affects output. C) inflation is determined by wage growth. D) monetary policy should be used to combat recessions.
One way the government can boost the economy out of a recession is:
A. with public announcements telling the public to save their money. B. by increasing government spending. C. by setting price ceilings on most goods so people can afford them. D. None of these will help an economy in recession.
Buying financial assets from banks and other financial institutions in order to stimulate the economy is referred to as:
A. money easing. B. precommitment policy. C. quantitative easing. D. operation twist.