Refer to the figure and assume the economy initially is in equilibrium at point a. In the new classical theory, a fully anticipated decrease in aggregate demand from AD 2 to AD 3 would move the economy:
A. directly from a to h.
B. from a to g to h.
C. directly from a to d.
D. from a to c to h.
A. directly from a to h.
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If a bank receives $1,000 in currency as a new deposit, its ability to make loans increases by $1,000
a. True b. False Indicate whether the statement is true or false
In contrast to private goods, public goods such as public radio are such that one person's consumption ________ diminish the amount available to others, and those who supply the public good ________ exclude those who do not pay
a. does; can b. does not; can c. does; cannot d. does not; cannot
One objection to a competitive and legal market for human organs for transplant is that it would:
A. Decrease the cost of organs for transplant B. Increase the cost of organs for transplant C. Decrease the supply of organs for transplant D. Increase the demand for organs for transplant
If a good is normal, the income elasticity of demand must be
A. positive and greater than 1. B. negative. C. zero. D. merely positive (not necessarily greater than 1).