If aggregate demand increases and, as a result, real domestic output and employment increase but the price level remains unchanged, we can assume that
A. the money supply has declined.
B. aggregate demand intersects aggregate supply in the Keynesian range of the aggregate supply curve.
C. aggregate demand intersects aggregate supply in the intermediate range of the aggregate supply curve.
D. aggregate demand intersects aggregate supply in the classical range of the aggregate supply curve.
B. aggregate demand intersects aggregate supply in the Keynesian range of the aggregate supply curve.
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Suppose that you lend $5,000 to a friend who pays you back $5,400 the next year. Suppose that prices that year rose by six percent and the real rate of return in the stock market was five percent
Your friend says that he or she was being more than fair by giving you more than the rate of inflation as a return. What do you think?
According to the adaptive expectations theory, people form their expectations of the future on the basis of future expectations
a. True b. False Indicate whether the statement is true or false
Inflation
a. leads people to use more resources to reduce money holdings. There is no way it can make labor markets work more efficiently. b. leads people to use more resources to reduce money holdings. However, it can make labor markets work more efficiently. c. leads people to use fewer resources to reduce money holdings. There is no way it can make labor markets work more efficiently d. leads people to use fewer resources to reduce money holdings. However, it can make labor markets work more efficiently.
All of the following are examples of normative statements EXCEPT:
A. Economic growth should not be allowed to exceed 5 percent per year. B. Reducing inflation should not be done at the expense of more unemployment. C. Unexpectedly high inflation redistributes wealth from lenders to borrowers. D. The Federal Reserve should act decisively to reduce inflation.