Suppose that the money multiplier is 3. If the monetary base increases by $1 million, the quantity of money will
A) increase by $3 million.
B) increase by $333,333.
C) decrease by $3 million.
D) decrease by $333,333.
A
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The short-run aggregate supply curve can slope upward because
A) prices are fixed in the short run. B) wages adjust immediately to changing economic circumstances. C) producers have misperceptions about the aggregate price level. D) prices adjust instantaneously.
Suppose we observe an economy experience an economic expansion and high inflation. This means the expansion is attributed to
a. growth in aggregate demand. b. growth in aggregate supply. c. a reduction in aggregate demand. d. a reduction in aggregate supply.
Utility analysis helps economists understand
A) how people make decisions about what they buy and how much. B) how to eliminate opportunity costs. C) how to eliminate scarcity. D) none of the above.
Structural unemployment will decrease when:
A. unemployment insurance benefits are increased. B. the minimum wage is decreased. C. the minimum wage is increased. D. union wages are increased.