Refer to Figure 10.8. Other things equal, a decrease in the nominal interest rate on money would best be represented by
A) a movement from point A to point C.
B) a movement from point A to point D.
C) a shift from LM1 to LM2.
D) a shift from LM2 to LM1.
C
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In the 2000s, the U.S. economy had both a ________ and a ________
A) large trade deficit; large capital inflow B) large trade surplus; large capital inflow C) large trade deficit; high saving rate D) large capital inflow; high saving rate E) large capital inflow; small government budget deficit
Starting from long-run equilibrium, a war that raises government purchases results in ________ output in the short run and ________ output in the long run.
A. lower; potential B. higher; potential C. higher; higher D. lower; higher
A potential negative effect of advertising for society is that it can:
A. be self-canceling and contribute to economic inefficiency. B. lower barriers to entry and undermine profits in the industry. C. reduce mutual interdependence and increase competition. D. be the major cause of price wars among firms in the industry.
Price and total revenue are directly related when demand is
A. unit price elastic. B. price elastic. C. price inelastic. D. perfectly price elastic.