Which of the following sequences best represents the crowding-out effect?
a. government purchases ? ? GDP ? ? supply of money ?? equilibrium interest rate ? ? quantity of goods and services demanded ?
b. government purchases ? ? GDP ? ? demand for money ?? equilibrium interest rate ? ? quantity of goods and services demanded ?
c. government purchases ? ? GDP ? ? demand for money ?? equilibrium interest rate ? ? quantity of goods and services demanded ?
d. taxes ? ? GDP ? ? demand for money ? ? equilibrium interest rate ?? quantity of goods and services demanded ?
c
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Suppose the money market is in the liquidity trap and the Fed increases the supply of money. We expect that
A) people will end up willingly holding more money. B) the excess money holdings will flow into the loanable funds market and there will be a decrease in interest rates. C) interest rates will increase, since the demand curve for money is upward sloping in this case. D) eventually, via the transmission mechanism, Real GDP will increase.
Number of EmployeesTotal Output16211315418520Table 16.2 Table 16.2 gives the number of oil changes that can be performed at a local oil change business based on the number of employees hired. If the price of an oil change is $20, what is the marginal revenue of the third employee?
A. $80 B. $5 C. $360 D. $40
Suppose a profit-maximizing firm in a perfectly competitive market is collecting $1,999 in total revenues. If the total cost of its fixed factors of production falls from $500 to $400, the firm will:
A. earn greater profits or smaller losses. B. expand its output. C. earn smaller profits or larger losses. D. lower its price.
Related to the Economics in Practice on p. 455: The Consumer Price Index in the United States was 215.3 in 2008 and 214.5 in 2009. If a retiree received a monthly pension check of $3,200.00 in 2008 and his pension is tied to the CPI, how much would his monthly pension check be in 2009?
A. $3174.40 B. $3,188.11 C. $3,200.00 D. $3,214.50