Suppose as a reaction to terrorist attacks, the U.S. government were to create a new branch of the military employing 1,000,000 new service men and women to monitor malls, large sporting events, and infrastructure (bridges, dams, refineries, etc.). Hiring and paying these people would likely
A. decrease aggregate demand.
B. increase aggregate supply.
C. increase aggregate demand.
D. decrease aggregate supply.
Answer: C
You might also like to view...
What is the impossibility theorem?
What will be an ideal response?
Suppose that Y = 4,000 and we are at a point on the money demand schedule where (M/P) = 600. Should Y rise to 4,200, the same quantity of real money balances
A) will not be demanded under any conditions. B) will be demanded again provided the interest rate does not change. C) will be demanded again provided the interest rate rises by a certain amount. D) will be demanded again provided the interest rate falls by a certain amount.
Let R2unrestricted and R2restricted be 0.4366 and 0.4149 respectively. The difference between the unrestricted and the restricted model is that you have imposed two restrictions. There are 420 observations. The F-statistic in this case is
A) 4.61 B) 8.01 C) 10.34 D) 7.71
Positive externalities can be an example of market failure
Indicate whether the statement is true or false