The Keynesian cause-and-effect sequence predicts that an increase in the money supply will cause interest rates to:
A. fall, boosting investment and shifting the AD curve rightward, leading to an increase in real GDP.
B. fall, cutting investment and shifting the AD curve leftward, leading to a decrease in real GDP.
C. rise, cutting investment and shifting the AD curve rightward, leading to an increase in real GDP.
D. rise, boosting investment and shifting the AD curve rightward, leading to an increase in real GDP.
Answer: A
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A) Budget surplus B) Trade surplus C) Trade deficit D) Budget deficit
If Sally maximizes her total utility by allocating time between two different activities, she will select the combination at which the marginal utility per hour spent is the same in both activities
a. True b. False
Suppose the market for Mexican food in your neighborhood was in equilibrium.a. Draw a diagram showing the demand and supply curve for Mexican food. Indicate the market equilibrium quantity and price in this market.b. Suppose the government imposed a binding price ceiling in this market, with the goal of making Mexican food affordable to most residents. Add the price ceiling to your diagram, and then identify the quantity demanded and quantity supply in this market with the price ceiling.c. Would the government be able to make Mexican food affordable to most people with the price ceiling? Explain your answer using the diagram you drew in part (b).
What will be an ideal response?
Currency appreciation would occur in a nation if
A. the demand for the nation's exports increases. B. the demand for the nation's imports increases. C. real interest rates in the nation decrease relative to the rest of the world. D. the inflation rate is higher within the nation than in the rest of the world.