Depending on the size of the multiplier and crowding-out effects, the rightward shift in aggregate demand from a tax cut could be larger or smaller than the tax cut
a. True
b. False
Indicate whether the statement is true or false
True
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If nuts and bolts are complements, an increase in the price of nuts caused by a change in the supply of nuts will a. increase the number of bolts sold. b. decrease the demand for nuts c. increase the price of bolts
d. decrease the number of bolts sold
Since classical economists and monetarists believe that the economy operates at full employment, real GDP, that is, along the vertical segment of aggregate supply,
a. any increase in the money supply can only end up raising the price level b. any increase in the money supply can only end up lowering the price level c. any decrease in the money supply can only end up raising the price level d. changes in the money supply will not affect the price level e. any increase in the money supply will cause both nominal and real GDP to increase
Michelle transfers $4,000 from her savings account to her checking account. What effect is this change likely to have on M1 and M2?
A. M2 increases and M1 stays the same. B. M1 increases and M2 decreases. C. M1 increases and M2 stays the same. D. M1 decreases and M2 increases.
Which of the following is TRUE for the perfectly competitive firm?
A. Price elasticity of demand is equal to 1. B. AR is more than price. C. AR is less than price. D. Price and MR are always equal.