A financial innovation, such as the introduction of money market mutual funds, which increases the liquidity of alternatives to money, would
A. increase money demand, shifting the LM curve up and to the left.
B. increase money demand, shifting the LM curve down and to the right.
C. decrease money demand, shifting the LM curve up and to the left.
D. decrease money demand, shifting the LM curve down and to the right.
Answer: D
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Based on the figure below. Starting from long-run equilibrium at point C, an increase in government spending that increases aggregate demand from AD to AD1 will lead to a short-run equilibrium at point ________ creating _____gap. 
A. D; an expansionary B. B; no output C. B; expansionary D. A; a recessionary
All economists agree that to justify that market failure has occurred, it is sufficient to have the market choose an inferior product over a superior product.
Answer the following statement true (T) or false (F)
Which of the following CANNOT be true at any output along a perfectly competitive firm's short-run supply curve?
A. Marginal cost is greater than average total cost. B. Marginal cost is greater than average variable cost. C. Average variable cost is greater than marginal cost. D. Average total cost is greater than marginal cost.
How does the politics of farm policy explain why costly and expensive farm programs have persisted in the United States despite a decline in the farm population and in the political power of the farm vote?
What will be an ideal response?