Which of the following would cause a decrease in aggregate demand?
A) a rise in wages B) an increase in the money supply
C) a fall in investor confidence D) an increase in the price level
C
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The average difference over a long period of the interest rate on long-term bonds and the interest rate on the short-term federal funds rate is called
A) risk premium. B) term premium. C) FED's premium. D) monetary premium.
A reduction in the money supply will result in:
A) a lower interest rate and more negative output gap B) a higher interest rate and more positive output gap C) a lower interest rate and more positive output gap D) a higher interest rates and more negative output gap
An increase in product price implies that
A) the firm's marginal factor cost will increase. B) the wage rate the firm pays will increase. C) the firm's demand for labor increases. D) the firm's demand for labor decreases.
Suppose that monopolistically competitive firms in a certain market are experiencing losses. In the transition from this initial situation to a long-run equilibrium,
a. the number of firms in the market decreases. b. each existing firm experiences a decrease in demand for its product. c. each firm experiences an upward shift of its marginal cost and average total cost curves. d. each existing firm's average total cost falls to bring economic profit back to zero.