According to the Keynesian transmission mechanism, if the Fed conducts an open market sale of government securities, it may cause which of the following in the investment goods market?
A) a rightward shift in the investment demand curve
B) a leftward shift in the investment demand curve
C) a movement down and along a given investment demand curve
D) a movement up and along a given investment demand curve
D
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Is the distribution of income across different countries in the world equitable? In other words, do all countries share the world's wealth equally?
What will be an ideal response?
Within the Keynesian model, the multiplier effect tends to
a. smooth out the up- and down- swings of the business cycle. b. promote price stability. c. magnify small changes in spending into much larger changes in output and employment. d. reduce the impact of an increase in investment on output and employment.
Unemployment causes production levels to be inefficient
a. True b. False Indicate whether the statement is true or false
If the wage rate rises and there is a net decrease in the use of capital by a firm
A. the substitution effect outweighed the output effect. B. the output effect outweighed the substitution effect. C. the substitution and output effects were equal. D. there is no way to determine the relative strengths of the output and substitution effects.