For monetary policy to be effective in changing planned investment spending:
a. interest rates must not be responsive to changes in the money supply.
b. interest rates must be sensitive to changes in Gross Domestic Product.
c. investment must be sensitive to changes in interest rates
d. investment must be sensitive to changes in the price level.
e. interest rates must be sensitive to changes in the price level.
c
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Goods with small substitution effects tend to be normal goods.
Answer the following statement true (T) or false (F)
Which of the following is an example of a measure of labor productivity?
A) Farm workers produce 30 bushels of wheat per worker per day. B) Autos get 30 gallons to the mile. C) The growth rate of per capita real GDP is 3.5 percent per year. D) Wages increase by 3.5 percent per year for 5 years.
If the price elasticity of demand for a product measures .45,
a. this good has many available substitutes. b. this good must be a nonessential good. c. this good is a high-priced good. d. a decrease in price will increase total revenue. e. this good is demand price inelastic.
Which of the following is true?
a. Real federal spending per person was approximately 50 times higher in 1900 than 1800. b. Real federal spending per person was approximately 80 times higher in 2012 than 1916. c. Real federal spending per person grew slowly under the Reagan Administration during the 1980s, but it increased rapidly under the Clinton administration in the 1990s. d. In recent years, government expenditures at the state and local levels have been greater than government spending at the federal level.