In the Keynesian model, suppose the Fed sets a target for the real interest rate. If the IS curve shifts down and to the left, and the Fed wants to keep output unchanged in the short run and the price level unchanged in the long run, it will
A) shift the LR curve up.
B) not shift the LR curve.
C) shift the LR curve down.
D) shift the IS curve up and to the right.
C
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Which of the following is NOT a mechanism the HPAE used to share wealth across all layers of society?
A) significant investments in rural infrastructure B) free public education C) tax policies that strongly redistributed income from rich to poor D) land reform
The crude quantity theory is based on each of these assumptions except that
A. if M rises by a certain percentage, P rises by that same percentage. B. V and Q are constants. C. MV = PQ. D. if M rises by a certain percentage, V will rise by that same percentage.
When a positive externality is present in a market, total surplus is:
A. higher when buyers only consider private benefits. B. lower when buyers receive a Pigouvian subsidy for the externality. C. higher when buyers receive a Pigouvian subsidy for the externality. D. Any of these statements could be true.
Suppose an economy experiences a 5% increase in human capital. We know that this will cause
A) Y/N to increase by more than 5%. B) Y/N to increase by exactly 5%. C) Y/N to increase by less than 5%. D) no change in Y/N. E) a reduction in output per worker.