According to the AS/AD model, a contractionary monetary policy is appropriate:
A. when saving equals investment.
B. whatever the level of saving and investment.
C. when saving is greater than investment.
D. when saving is less than investment.
Answer: D
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Use the following graph to answer the next question.
If Canadian investors buy more U.S. financial and real assets, ________.
A. the demand curve will shift right B. the demand curve will shift left C. the supply curve will shift right D. the supply curve will shift left
The supply of labor curve is
A) vertical at potential GDP. B) upward sloping. C) downward sloping. D) horizontal at the equilibrium wage rate.
Abby, Bobbi, and Deborah each buy ice cream and paperback novels to enjoy on hot summer days. Ice cream costs $5 per gallon, and paperback novels cost $8 each. Abby has a budget of $80, Bobbi has a budget of $60, and Deborah has a budget of $40 to spend on ice cream and paperback novels. Who can afford to purchase 4 gallons of ice cream and 5 paperback novels?
a. Abby, Bobbi, and Deborah b. Abby only c. Abby and Bobbi, but not Deborah d. None of the women can afford to purchase 4 gallons of ice cream and 5 paperback novels.
Why is national defence provided by the government?
a) Free riders make it difficult for private markets to supply the socially optimal quantity. b) It is impossible for private markets to produce public goods. c) If the good were produced in private markets, most likely too much of the good would be produced. d) Products provided by the government can be produced more efficiently.