In the money market, an increase in money demand will:
A) result in a rightward shift in the money demand curve increasing interest rates.
B) result in a rightward shift in the money demand curve decreasing interest rates.
C) result in a leftward shift in the money demand curve increasing interest rates.
D) result in a leftward shift in the money demand curve decreasing interest rates.
A
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A recessionary gap results when
A) aggregate demand is below the level consistent with full employment. B) aggregate demand is above the level consistent with full employment. C) aggregate supply and aggregate demand are not in short-run equilibrium. D) aggregate supply decreases.
Suppose a vote was taken in a small town of 11 people to determine how much of the budget should go toward education spending. Five individuals want 10 percent, five individuals want 80 percent and one person wants 25 percent. According to the median-voter theorem, the chosen amount to spend on education will be ______ of the budget.
A. 10 % B. 80 % C. 45 % D. 25%
You're the president of the United States and your economic advisor tells you that the economy is in a state of high inflation, high unemployment, and low growth. You know then that your advisor is talking about
a. stagnation b. deflation c. depression d. stagflation e. prosperity
Refer to Figure 18.2. The sale of bonds by the Fed in the open market will result in
A. An increase in the money supply and a move from AS1 to AS2. B. A decrease in the money supply and a move from AD2 to AD1. C. An increase in the money supply and a move from AD1 to AD2. D. A decrease in the money supply and a move from AS2 to AS1.