If the demand for money is Md = 100 +.25Y – 100r and then the increase in money demand rises by 100, the LM curve shifts to the
a. right by 400.
b. right by 100.
c. left by 200.
d. left by 400.
e. none of the above.
D
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The quantity of money demanded
A) is infinite. B) is directly controlled by the Fed. C) has no opportunity cost. D) is the quantity that balances the benefit of holding an additional dollar of money against the opportunity cost of doing so. E) changes very infrequently.
In the typical AC curve, the downward-sloping part is attributable to
A. spreading fixed costs over larger outputs and increasing returns to the variable inputs. B. declining administrative costs as output increases. C. falling fixed costs. D. rising total product.
When the ownership of the different stages of production of a commodity lies with different individuals, it becomes difficult to take decisions on capacity expansion because of all the following reasons, EXCEPT:
a. differences in attitudes toward risk. b. differences in motivation. c. different degrees of risk exposure. d. different abilities to hedge themselves.
Personal income taxes:
A. make recessions and inflationary episodes more severe. B. make recessions and inflationary episodes less severe. C. make recessions more severe and inflationary episodes less severe. D. make recessions less severe and inflationary episodes more severe.