If the government increases military spending ________
A) the IS curve would shift to the left
B) output will decrease if interest rates remain fixed
C) the unemployment rate could fall
D) all of the above
E) none of the above
C
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The income elasticity of demand
A) is positive only. B) is negative only. C) must lie between -1 and +1. D) can be positive, negative, or zero.
In the short run, a perfectly competitive firm can make a profit, a loss, or go out of business.
Answer the following statement true (T) or false (F)
From 1922 to 1929, the total value of the stock market:
A. more than tripled. B. decreased by nearly 50 percent. C. decreased by nearly 90 percent. D. stayed the same.
Identify how ideas from monetarism and rational expectations have been incorporated into mainstream thinking about macroeconomics.
What will be an ideal response?