Monetary policy affects aggregate demand with a lag. Approximately how long does it take for monetary policy actions to affect aggregate demand?
A lag of six months is the typical estimate for monetary policy to affect aggregate demand.
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Which of the following increases the demand for a good?
A) a rise in the price of a complement B) the expectation that future income will be higher C) an increase in income, assuming the good is an inferior good D) a decrease in the number of buyers E) a fall in the price of a substitute
What effect does a price hike have on the total revenue of the producers?
What will be an ideal response?
Suppose everyone in a town votes that they prefer improved public transportation systems instead of public parks, then according to the criteria of ________________, that preference should not change even if a third option, like a public zoo, is included.
A. Transitivity B. No dictator C. Unanimity D. Independence of irrelevant alternatives
If the government decreases the income tax rate, then:
A. GDP will decrease. B. aggregate demand will shift left. C. aggregate demand will shift right. D. aggregate supply curve with shift to the right.