If the level of government spending rises and simultaneously there is a fall in the money stock, we definitely know that
a. income will rise.
b. the change in the interest rate will be ambiguous.
c. income will fall.
d. the interest rate will fall.
e. None of the above
E
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In the Keynesian model, money is
A) neutral in both the short run and the long run. B) neutral in neither the short run nor the long run. C) neutral in the short run, but not in the long run. D) neutral in the long run, but not in the short run.
A monopoly has:
A. no competition at all. B. just a few large competitors. C. many competitors. D. no ability to set price.
A firm that makes zero economic profits
A. Covers all its costs, including a provision for normal profit. B. Incurs an accounting loss if fixed costs are greater than variable costs. C. Must eventually go bankrupt and exit the industry. D. Does not cover its variable costs and should shut down in the short run.
To determine the equilibrium price level and equilibrium level of real GDP, the aggregate demand and aggregate supply must:
A. be considered separately. B. intersect. C. be disregarded. D. be considered as a multiplier.