The Monetarist model expands the Keynesian model by proposing that
A) decreases in the quantity of money lead to higher interest rates.
B) the government should lower taxes promote economic growth.
C) decreases in tax rates generate higher consumption.
D) decreases in the growth rate of the quantity of money trigger expansions by controlling inflation.
E) markets should be left alone to determine the optimal outcome.
A
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A. Everything else remaining unchanged, what is likely to happen to the credit demand curve of an economy if:
i. businesses in the economy see scope for growth and are planning to expand production in the future? ii. households are pessimistic about future incomes? iii. the government is planning to borrow money from financial institutions for investment in infrastructures? b. Everything else remaining unchanged, what is likely to happen to the credit supply curve of an economy if firms tend to hold on to retained earnings instead of paying dividends?
Under a fixed exchange rate system, the central bank of a country experiencing a balance of payments surplus will:
A) increase the supply of domestic currency to prevent currency depreciation. B) increase the demand for domestic currency to prevent currency depreciation. C) increase the supply of domestic currency to prevent a currency appreciation. D) increase the demand for domestic currency to prevent a currency appreciation.
When the U.S. dollar drops in value exports tend to:
A. go up, which decreases the trade deficit. B. fall, which increases the trade deficit. C. go up, which increases the trade deficit. D. fall, which decreases the trade deficit.
Which of the following is true?
a. A fall in a good's price leads to a decrease in quantity demanded, illustrated by moving along a demand curve. b. According to the law of demand, other things equal, when the price of a good or service falls, demand increases.c. A change in demand for chocolate bars is caused by a change in the price of chocolate bars d. None of the above is true.