Contractionary policies are government stabilization policies intended to decrease:
A. population.
B. unemployment.
C. spending.
D. average labor productivity.
Answer: C
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When a central bank sells bonds, cash reserves throughout the financial system increase, interest rates fall, and investment spending increases
Indicate whether the statement is true or false
Max has allocated $100 toward meats for his barbecue. His budget line and an indifference map are shown in the above figure. Which bundle will Max choose?
A) a B) b C) c D) d
The diagram concerns supply adjustments to an increase in demand (D 1 to D 2 ) in the immediate market period, the short run, and the long run. In the immediate market period, the increase in demand will:
A. have no effect on either equilibrium price or quantity.
B. increase equilibrium price but not equilibrium quantity.
C. increase equilibrium quantity but not equilibrium price.
D. increase both equilibrium price and quantity.
People can write checks against
a. demand deposits and money market mutual funds b. demand deposits but not money market mutual funds c. money market mutual funds but not demand deposits d. neither demand deposits nor money market mutual funds