In IS-LM-FE analysis, expansionary monetary policy
A. lowers levels of gross domestic product (GDP).
B. shifts the LM curve to the left.
C. leads to higher interest rates.
D. leads to lower interest rates.
Answer: D
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Why do workers exert more effort when they are paid higher salaries?
What will be an ideal response?
Some resources are better suited to produce certain goods than other resources. This fact leads to
A) a linear production possibilities curve. B) inefficiency in the economy. C) the law of increasing additional cost. D) increases in technology.
Which of the following is an unintended side effect of protectionist policies to protect domestic jobs?
a. The consumers are paying higher prices to the protected industry, so they will purchase less product from that industry, and jobs are lost in the protected industry. b. The protected product is sold to other firms, who must now pay a higher price for a key input, so those firms will lose sales to foreign producers who do not need to pay the higher price. c. The protected product is sold to other firms, who must now pay a higher price for a key input, so those firms will increase sales from foreign producers. d. The consumers are paying higher prices to the protected industry, so they will purchase more products from unprotected industries, and jobs are gained in the unprotected industry.
Differences in interest rates for different type of loans are due to:
A. the amount of the loan. B. the length of time the borrower has to repay the loan. C. government policy. D. exchange rate