With respect to the Keynesian liquidity trap, at very low levels of income, equilibrium in the money market occurs at points along the flat portion of the money demand schedule where
a. the elasticity of money demand is extremely high.
b. money demand is associated with a low interest elasticity.
c. money demand is completely interest inelastic.
d. None of the above
A
You might also like to view...
The price of silver increases from $10 per ounce to $15 per ounce while the price of gold increases from $300 per ounce to $310. In this situation, the price of silver relative to the price of gold has
a. fallen. b. risen. c. remained the same. d. cannot be determined given the information provided.
Suppose the government imposes a per unit tax on an item whose production process creates a negative externality. Suppose the tax is exactly the value of the marginal externality cost. If the government now uses the tax revenue to clean up pollution from this process, the market will:
a. have internalized all costs and benefits. b. be inefficient. c. be destroyed. d. not have failed. e. be subject to obligatory controls.
Monopolistic competition tends to lead firms to have wasted capacity. Why?
According to the classical economists, if there is a recession, the government should ________.
Fill in the blank(s) with the appropriate word(s).