If money demand falls on its own (i.e., not in response to a spending shock), what must the Fed do to stabilize GDP?
a. Increase the money supply
b. Decrease the money supply
c. Leave the money supply and money demand unchanged
d. Increase money demand
e. Decrease money demand
B
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When a good becomes more scarce, and the government prevents sellers from raising prices,
A) demanders are prevented from competing against one another to obtain the good. B) the opportunity cost to purchasers of obtaining the good will nonetheless rise as long as the quantity demanded is greater than the quantity supplied. C) the quantity purchased will be greater than the quantity supplied. D) there will be no rationing system to allocate the good among competing users.
The tendency for individuals to assign higher values to goods when they own the goods than when they do not possess the goods is known as the:
A) substitution effect. B) endowment effect. C) income effect. D) anchoring effect.
Which of the following statements best describes the neoclassical perspective?
a. The level of potential GDP is determined by long-term productivity growth, and the economy typically will return to full employment after a change in aggregate demand. b. The level of potential GDP is determined by short-term productivity growth, and the economy typically will return to full employment after a change in aggregate demand. c. The level of potential GDP is determined by full employment ,and the long-term productivity growth will return after a change in aggregate demand. d. The level of potential GDP is determined by full employment, and short-term productivity growth will return after a change in aggregate demand.
When U.S. net exports rise, which increases the aggregate quantity of goods and services demanded, the dollar must have
a) depreciated b) reciprocated. c) equivocated. d) appreciated.