According to liquidity preference theory, a decrease in money demand for some reason other than a change in the price level causes
a. the interest rate to fall, so aggregate demand shifts right.
b. the interest rate to fall, so aggregate demand shifts left.
c. the interest rate to rise, so aggregate demand shifts right.
d. the interest rate to rise, so aggregate demand shifts left.
a
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John Maynard Keynes disagreed with the classical economists because he believed that
A) wages and prices adjust slowly. B) international trade plays a major role in the macroeconomy. C) government intervention in the economy cannot reduce business cycles. D) unemployment will be eliminated quickly by the invisible hand of the market.
A firm produces 60 units of output with 5 workers, 65 units with 6 workers, and 68 units with 7 workers. The firm's production function exhibits diminishing marginal productivity between 5 and 7 workers
a. True b. False Indicate whether the statement is true or false
Nominal GDP divided by the money stock equals:
A. the value of transactions. B. the price level. C. velocity. D. real GDP.
If a Cournot duopolist announced that it will double its output
A) it becomes the leader B) the other firm does not view the announcement as credible C) the other firm will shut down D) the other firm will double output also