Assuming money neutrality in the classical model, a 10% increase in the nominal money supply would cause
A. a 10% decrease in the real money supply.
B. no change in the real money supply.
C. a 10% increase in the real money supply.
D. a less-than-10% change in the price level due to a shift in the aggregate supply curve.
Answer: B
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A negative shock in aggregate demand will likely result in no permanent change in ________
A) output B) the equilibrium inflation rate if the central bank responds by lowering interest rates C) aggregate demand, if the central bank responds by lowering interest rates D) all of the above E) none of the above
Production possibilities curve are usually bowed outward. This is because
a. the more resources a society uses to produce one good, the fewer resources it has available to produce another good. b. it reflects the fact that the opportunity cost of producing a good decreases as more and more of that good is produced. c. of the effects of technological change. d. resources are specialized, that is, some are better at producing particular goods rather than other goods.
John Maynard Keynes drew many economists ______________ the classical view. The classical view held that a market economy __________ regulate itself to avoid long periods of excessive unemployment
A) toward; can B) toward; cannot C) away from; can D) away from; cannot
Linda earns an income of $3,000 per month. She saves 10 percent and spends the remainder on food, lodging, and other expenses. So far, she has managed to save $20,000. What is her consumption per month?
What will be an ideal response?