Assuming money neutrality in the classical model, a 10% increase in the nominal money supply would cause
A) a 10% increase in the real money supply.
B) a 10% decrease in the real money supply.
C) no change in the real money supply.
D) a less-than-10% change in the price level due to a shift in the aggregate supply curve.
C
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If investment has a high sensitivity to the interest rate, the IS curve is rather __________, so that monetary policy has a __________ effect on GDP
A) flat; strong B) flat; weak C) steep; strong D) steep; weak
The mid-1990s political debate on welfare resulted in Congress legislating in August of 1996,
a. the Taft-Hartley Act b. the Small Business Job Protection Act c. Graham-Rudman-Hollings d. the Wilmot Proviso e. the Personal Responsibility and Work Opportunity Reconciliation Act
If all banks are subject to a uniform 25% reserve requirement and demand deposits are the only form of money, a $1,000 open market sale by the Fed would cause the money supply to
A. increase by $1,000. B. decrease by $1,000. C. decrease by $4,000. D. increase by $4,000.
Which of the following is FALSE?
A) Social costs do not include private costs. B) Private costs do not include external costs. C) If social costs are greater than private costs, "too much" of a good is being produced. D) Pollution is a social cost.