An increase in the government budget surplus will shift the ________ curve for loanable funds to the ________ and the equilibrium real interest rate will ________
A) demand; right; rise B) demand; left; fall C) supply; left; rise D) supply; right; fall
D
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Both the permanent-income and life-cycle hypotheses are based on the crucial assumption of ________ expectations
A) rational B) adaptive C) backward-looking D) forward-looking
Schumpeter hypothesized that monopolies
a. do not maximize profits b. advertise extensively to keep out new entrants c. may charge a lower price than the price generated in a perfectly competitive market d. usually experience constant returns to scale e. have higher costs than smaller firms
The value of money falls. This might be because the Federal Reserve
a. bought bonds, which increased the money supply. b. bought bonds, which decreased the money supply. c. sold bonds, which increased the money supply. d. sold bonds, which decreased the money supply.
Automatic stabilizers are
A. tools used by the President's Council of Economic Advisers. B. provisions that cause changes in government spending and taxes without new action by Congress or the President. C. policies set by certain committees in Congress. D. provisions that cause the aggregate supply curve to be upward sloping.