Keynesians argue that an exogenous decrease in investment is likely to lead to
A) an increase in interest rates.
B) an increase in saving.
C) a decrease in the money supply.
D) a decrease in output.
D
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Any point on the aggregate demand schedule must also be
A) a point that clears the market for real money balances. B) a combination of real interest rates and income where aggregate desired expenditures is in balance. C) a point where money demanded is equal to money supplied. D) all of the above.
Refer to Figure 12.6. Under a fixed exchange rate system, the central bank cannot increase the output gap with expansionary policy and still maintain the fixed exchange rate if the economy is at
A) point A. B) point B. C) point C. D) point X.
All of the following are true, except
a. Some consumers may infer high quality from high price b. Low prices can indicate lower quality given that no other information is available c. Promotional campaigns do not affect consumer's perception on quality d. It makes more sense to raise price when advertising makes demand less elastic
If proved reserves of a mineral amount to twelve years of use at the current rate of consumption,
a. it is likely, though not certain, that we will run out of that mineral in about twelve years. b. we are likely to run out of the mineral in less than twelve years if our rate of use has been increasing. c. if the good becomes more scarce relative to supply in the future, its price will rise and thereby encourage both conservation and exploration. d. if proved reserves diminish, lower prices will extend the day of exhaustion well into the future.