The IS curve shows the combinations of ________ and ________ where the goods market is in equilibrium
A) aggregate expenditure; real GDP
B) the real interest rate; real GDP
C) potential GDP; aggregate expenditure
D) the nominal interest rate; the quantity of money
B
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Suppose the economy was initially in a long-run equilibrium. Then the world economy expands so that foreign incomes rise. U.S. aggregate demand ________ and eventually the money wage rate ________
A) increases; rises B) increases; falls C) decreases; rises D) decreases; falls
For firms that sell one product in a perfectly competitive market, marginal revenue is always:
A. greater than market price. B. less than market price. C. the same as market price. D. equal to average total cost.
The primary advantage of mutual funds is that they
a. always provide the highest return. b. always allow people to "beat the market.". c. allow people to diversify and reduce risk. d. allow people to diversify, which increases risk and return.
If velocity is constant in the long run, which of the following results flow from the quantity theory of money?
A) A change in the money supply changes real GDP by an equal percentage. B) A change in the money supply changes nominal GDP by an equal percentage. C) A change in the money supply changes real interest rates by an equal percentage. D) A change in the money supply changes consumer lending by an equal percentage.