The change in total planned real expenditures resulting from a change in the real value of money balances when the price level changes, all other things held constant, is
A. the real-balance effect.
B. the open economy effect.
C. demand side inflation.
D. the interest rate effect.
Answer: A
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Which of the following would cause the level of income to change by the greatest amount, ceteris paribus?
A. A reduction in personal income taxes of $10 billion. B. An increase in Social Security payments of $10 billion. C. An increase in defense spending of $10 billion. D. All of the other choices have equal impacts on the level of income.
An increase in interest rates decreases the marginal revenue product of investment.
Answer the following statement true (T) or false (F)
A monopoly firm is different from a competitive firm in that:
A. a monopolist's demand curve is perfectly inelastic whereas a competitive firm's demand curve is perfectly elastic. B. a monopolist can influence market price whereas a competitive firm cannot. C. there are many substitutes for a monopolist's product whereas there are no substitutes for a competitive firm's product. D. a competitive firm has a U-shaped average cost curve whereas a monopolist does not.
From 1995 to 2001, the U.S. public debt relative to GDP:
A. Increased, and fell since then B. Decreased, and increased since then C. Increased steadily and continued to increase since then D. Was roughly constant, but has increased since