Answer the following statements true (T) or false (F)
1) An increase in taxes will shift both the consumption schedule and the saving schedule down.
2) The Great Recession of 2007-2009 caused a basic change in consumer behavior, shifting the saving schedule up.
3) If the real rate of interest increases, then the level of investment in the economy will also increase.
4) A business firm will purchase additional capital goods if the real rate of interest in the economy is less than the expected rate of return from the investment.
5) An increase in business taxes will tend to shift the investment-demand curve rightward.
1) T
2) T
3) F
4) T
5) F
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Which of the following is included in M1, but not in M2?
A) currency B) checking account deposits C) travelers checks D) Everything in M1 is in M2.
Suppose that a technological advance raises total factor productivity. Explain, step-by-step, how the economy adjusts to arrive at a new long-run equilibrium
What will be an ideal response?
The Irish production possibilities curve shifts to the left when there is
a. an increase in the Irish labor supply b. innovation in the production of Irish goods c. a civil war that destroys much of Ireland's resource base d. unemployment among Irish workers e. a choice among the Irish of more capital goods last period
Open market operations are
A. the buying and selling of existing U.S. government securities in open private markets by the Fed in order to change the money supply. B. the selling of new government securities by banks in order to increase the money supply. C. the selling of new government securities in open private markets by banks in order to finance the deficit. D. the buying and selling of existing U.S. government securities in open private markets by citizens.