Assume the output market adjusts more rapidly than the asset market. A point of disequilibrium that is below both AA and DD will therefore initially result in
A) an increase in output.
B) a decrease in output.
C) a contraction of the money supply.
D) a depreciation of the home currency.
E) an appreciation of the home currency.
B
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Suppose the market supply curve is upward sloping and market demand is perfectly inelastic. If the market price is held above the equilibrium level, which of the following statements about the resulting outcome is not true?
A) The decrease in consumer surplus is fully captured by the producers. B) There will be an excess quantity supplied. C) Quantity demanded will remain the same. D) Quantity demanded will decline.
Money is channeled from savers to borrowers by banks and other _______.
Fill in the blank(s) with the appropriate word(s).
Reducing the marginal tax rate on income will
A) reduce the tax wedge faced by workers and increase labor supplied. B) raise the return to entrepreneurship and encourage the opening of new businesses. C) increase the after-tax return on saving, and encourage saving. D) All of the above are correct.
Vaccinations are a ________ good that create a ________ externality.
A. private; positive B. private; negative C. public; negative D. public; positive