An increase in the money supply, other things being constant

A. causes the price level to increase.
B. generates an increase in the demand for money.
C. causes the purchasing power of money to increase.
D. causes interest rates to rise.


Answer: A

Economics

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If a firm acquires new machines that complement labor

A. there will be no effect on the marginal product of labor curve. B. the amount of labor services hired will decrease. C. the marginal revenue product of labor curve will shift upward. D. the marginal revenue product of labor curve will shift downward.

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Interest-rate risk would not matter to which of the following bondholders?

A. A holder of a U.S. government bond. B. A holder of a U.S. government bond that plans on holding it until it matures. C. A holder of a U.S. government bond who plans on selling it in one year. D. A holder of a U.S. government bond indexed for inflation.

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Because of automatic stabilizers, in recessions the government budget deficit ________, while in expansions the deficit ________.

A. falls; rises B. rises; falls C. falls; falls D. rises; rises

Economics