In the Baumol model, a change in fixed costs will
A) increase total quantity sold.
B) have no effect on total quantity sold.
C) decrease total quantity sold.
D) have an effect on total quantity sold.
D
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Which one of the following is an example of discretionary fiscal policy used to correct an inflationary gap?
A) an increase in government expenditures approved by Congress B) decrease in the money supply by the Federal Reserve C) a tax increase passed into law by Congress D) an agreement among major banks to lower interest rates
In developed industries, the interest rate tends to be lower than in newer industries. What could explain this?
A) greater demand for loans in the developed industry B) greater supply for loans in the new industry C) greater demand for loans in the new industry D) lower supply for loans in the developed industry
The overall price level and real GDP both decline as one moves downward along the demand for money curve
Indicate whether the statement is true or false
A reduction in the real interest rate will increase investment spending, other things equal, because firms will make an investment purchase if the expected return is
What will be an ideal response?