A monopolist faces a demand curve that
A) is perfectly horizontal at the market price.
B) is below the marginal revenue curve.
C) is downward sloping.
D) coincides with the industry supply.
Answer: C
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If society wants aggregate demand to increase without changes in the price level, then there must be
A) an increase in autonomous spending combined with an increase in the marginal propensity to save. B) a gap between full employment and the current level of real GDP and an increase in autonomous spending. C) an increase in autonomous saving so that autonomous investment spending can increase. D) an increase in autonomous spending and a horizontal short-run aggregate supply curve.
Based on the model of the money market, when real GDP increases, the equilibrium interest rate should
A) stay the same. B) increase. C) decrease. D) increase to the same extent that the supply of money increases.
Money is always neutral. This statement is most likely to be made by a proponent of the
a. new Keynesian model. b. monetarist model. c. real business cycle model. d. classical model. e. both c and d.
Which of the following compose the reserves of a commercial bank?
a. checkable deposits and time deposits b. vault cash and deposits of the bank with the Federal Reserve c. U.S. securities and stock equity d. cash and U.S. securities