In the short-run macro model, firms that sell more than they produce will respond by
a. reducing output
b. increasing output
c. reducing prices
d. raising prices
e. not changing production because the market will adjust on its own
B
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An increase in the public debt would most likely indicate that
A) national saving has increased. B) the budget deficit has increased. C) the budget deficit has decreased. D) the trade deficit has decreased.
The interest rate that banks charge on loans to their best customers is called the:
A) federal funds rate. B) discount rate. C) mortgage interest rate. D) prime rate.
Explain how the aggregate demand curve is derived
What will be an ideal response?
If policymakers are expected to increase the money supply, then Monetarists argue that bond demand and thus prices will __________
When it occurs, the actual increase in the money supply will have no further effect on bond prices and thus the anticipated higher inflation rate will cause interest rates to __________. A) increase; increase B) increase; decrease C) decrease; increase D) decrease; decrease