Most economists believe that an increase in the quantity of money results in
a. an increase in the demand for goods and services.
b. lower unemployment in the short run.
c. higher inflation in the long run.
d. All of the above are correct.
d
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The circular flow diagram depicts the economy consisting of:
a. the government and households. b. households and international companies. c. households and firms. d. firms and the government.
Supply-side tax cuts also tend to reduce aggregate demand and promote recession
a. True b. False Indicate whether the statement is true or false
What happened in the banking industry with the introduction of ATMs which had a higher MP/P than for the substitute resource of human tellers?
A. Human tellers replaced many ATMs because people did not want to use ATMs B. ATMs replaced many human tellers because it reduced banks' costs C. More of both ATMs and human tellers were used because banks were more productive D. Less of both ATMs and human tellers were used because banks did not know how to use the new technology
Refer to the diagram for the federal funds market. If the Fed wants to raise the federal funds rate by one-half of a percentage point, it should:
A. act to increase reserves by $50 billion.
B. act to reduce reserves by $50 billion.
C. pursue an expansionary monetary policy.
D. buy bonds from banks and the public.