If the economy is in equilibrium, it must be
a. on the 45° line.
b. on the 60° line.
c. below the 45° line.
d. below the 60° line.
a
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If the banking system has a required reserve ratio of 40 percent, then the money multiplier is
A) 2. B) 2.5. C) 4. D) 8.
In the monetary intertemporal model, the long-run effects of an increase in the level of money include
A) an increase in employment. B) lower output. C) higher real wages. D) higher nominal wages.
Government prohibition of advertising cigarettes on television would most likely result in
A) a rightward shift in the demand curve for cigarettes. B) a leftward shift in the demand curve for cigarettes. C) a rightward shift in the demand curve for television advertising time. D) no change in the market for either cigarette or television advertising.
Assume that Sweden will specialize in either boats or cars. What is their opportunity cost of producing two boats?
