According to the Keynesian transmission mechanism, an increase in the money supply will __________ the interest rate, causing a __________ in investment, which then __________ Real GDP
A) raise; fall; raises
B) raise; rise; lowers
C) raise; fall; lowers
D) lower; fall; lowers
E) lower; rise; raises
E
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When young students are hungry, they can be disruptive and inattentive in class. Thus, providing lunch to students has external benefits. The figure above represents the market for school lunches before and after government vouchers are issued
a. What is the unregulated private market equilibrium? b. What is the efficient quantity of lunches? c. What is the amount of the voucher necessary to move the economy to the efficient number of lunches? d. When vouchers are used, what is the dollar price of the lunch that suppliers receive and what is the dollar price that consumers pay when the voucher is used?
In evaluating the degree of economic efficiency in a market, we can state that the size of the deadweight loss in a market will be smaller
A) the greater the difference between marginal cost and average revenue. B) the smaller the difference between marginal cost and price. C) the greater the difference between marginal cost and price. D) the smaller the difference between marginal cost and average total cost.
In the long run, unusually high unemployment
a. indicates that an economy is operating above potential GDP b. forces the wage rate down c. eventually causes the aggregate supply curve to shift upward d. pushes the price level upward e. causes the aggregate demand curve to shift rightward
Which of the following contributed to the increase in income inequality among families in the United States during the 1980s and 1990s?
a. an increase in the highest marginal tax rates that forced high income earners to work more in order to maintain their income b. an increase in the proportion of both single-parent and dual-earner families c. a decrease in the size of the earnings differential between college graduates and high school graduates d. all of the above