The impact lag is the time between
A) a change in the money supply and a change in interest rates.
B) a change in the money supply and a change in GDP.
C) the use of a Federal Reserve tool and its effect on GDP.
D) the use of a Federal Reserve tool and its effect on the money supply.
C
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Differentiate between an income effect and a substitution effect
What will be an ideal response?
Suppose the market demand function in a certain market where Q is measured in thousands of units is Qd = 20 - 2.5P, and the market supply function is Qs = 2.5P - 7.5. How much deadweight loss would there be in this market if the quantity bought and sold was 6,000 units?
A. $0.03 B. $25 C. $500 D. $2,500
During the expansion phase of the business cycle, we would normally expect to see real income ____, price level ____, and unemployment rate ____.
a. increasing; increasing; increasing b. increasing; decreasing; decreasing c. increasing; increasing; decreasing d. falling; increasing; increasing
If home prices are falling, consumers purchasing a home will find their purchasing power of money has increased. This benefit to consumers is called the:
A. inflation effect. B. wealth effect. C. home equity effect. D. multiplier effect.