A decrease in supply means:
A) a shift to the left of the entire supply curve.
B) moving downward (to the left) along the supply curve with lower prices.
C) less will be demanded at every price.
D) more will be supplied at every price.
Ans: A) a shift to the left of the entire supply curve.
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If the required reserve ratio is 10 percent, currency in circulation is $400 billion, checkable deposits are $800 billion, and excess reserves total $0.8 billion, then the M1 money multiplier is
A) 2.5. B) 1.67. C) 2.0. D) 0.601.
One of the broad categories that could cause the aggregate demand curves to shift is changes to the _________ of consumers or firms.
a. health b. behavior c. savings d. employment
In a perfectly competitive constant-cost industry:
A. there is no way to predict what will happen to factor prices as industry output increases. B. factor prices rise as industry output increases. C. factor prices fall as industry output increases. D. factor prices do not change as industry output increases.
Expansionary fiscal policy that raises the budget deficit may:
A. increase business investment by reducing interest rates. B. reduce business investment by reducing interest rates. C. increase business investment by increasing interest rates. D. reduce business investment by increasing interest rates.