Changes to the benefits system, so that there was less incentive to work, would most likely:
a) Shift aggregate supply outwards so more is supplied at each price
b) Shift aggregate supply inwards so less is supplied at each price
c) Shift aggregate demand outwards so more is demanded at each price
d) Shift aggregate demand inwards so less is demanded at each price
Answer: b) Shift aggregate supply inwards so less is supplied at each price
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Large economies, such as the U.S. economy, should ________ adopt a flexible exchange rate, because giving up the power to stabilize the domestic economy via monetary policy ________.
A. almost never; is of little consequence B. nearly always; is of little consequence C. nearly always; comes with a high cost D. almost never; comes with a high cost
Use the above table. The MPS is
A) 0.91. B) 0.80. C) 0.20. D) 0.09.
The consumption function will shift upward if real asset and money holdings:
a. increase, if people expect prices to increase, if interest rates decrease, and if taxes decrease. b. increase, if people expect prices to increase, if interest rates increase, and if taxes increase. c. increase, if people expect prices to increase, if interest rates increase, and if taxes decrease. d. decrease, if people expect prices to decrease, if interest rates decrease, and if taxes decrease. e. decrease, if people expect prices to increase, if interest rates increase, and if taxes decrease.
The line that depicts the relationship between the average expected rate of return and the risk level of a financial asset is known as the:
A. Beta Line. B. Security Market Line. C. Risk Premium Line. D. Risk-Return Line.