Suppose the government increases its expenditures by $100 million and finances the resulting deficit by selling bonds. Then the LM curve will
A) shift rightward.
B) shift leftward.
C) become steeper.
D) None of these.
D
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In the above figure, if the interest rate is 8 percent per year, the quantity of money demanded is
A) less than the quantity of money supplied, and the interest rate will change. B) less than the quantity of money supplied, and the demand curve for money will shift. C) greater than the quantity of money supplied, and the supply curve of money will shift. D) greater than the quantity of money supplied, and the interest rate will change. E) greater than the quantity of money supplied, and the demand curve for money will shift.
Government bureaus, unlike private firms,
a. derive their revenue by selling output to the government b. have incentives to respond to consumers' desires c. price their output by equating marginal cost and marginal revenue d. attempt to achieve zero profit e. receive little consumer feedback
When the central bank lowers the reserve requirement on deposits, _____
a. the money supply in an economy increases and interest rates decrease b. both the money supply and interest rates in an economy decrease c. both the money supply and interest rates in an economy increase d. the money supply in an economy decreases and interest rates increase
If inflation rises more quickly in the United States than in France, U.S. exports to France should rise.
Answer the following statement true (T) or false (F)