According to liquidity preference theory,
a. an increase in the interest rate reduces the quantity of money demanded. This is shown as a movement along the money-demand curve. An increase in the price level shifts money demand to the right.
b. an increase in the interest rate increases the quantity of money demanded. This is shown as a movement along the money-demand curve. An increase in the price level shifts money demand leftward.
c. an increase in the price level reduces the quantity of money demanded. This is shown as a movement along the money-demand curve. An increase in the interest rate shifts money demand rightward.
d. an increase in the price level increases the quantity of money demanded. This is shown as a movement along the money-demand curve. An increase in the interest rate shifts money demand leftward.
a
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If future total factor productivity increases
A) labor demand increases. B) government expenses increase. C) consumption demand decreases. D) investment demand increases.
Suppose that the MPC out of disposable income was 0.8 and the tax function for a given economy was T = – 30 + 0.25Y
An increase in the intercept of the tax function of 10 units (from – 30 to – 20) would cause equilibrium income in the simple Keynesian model to fall by a. -20 units. b. 10 units. c. 20 units. d. 40 units.
A cable company can add a subscriber for ________ and a market failure occurs because the price charged ________
A) nearly zero marginal cost; exceeds marginal cost B) less than average cost; reduces consumer surplus C) nearly zero marginal cost; is extortionist D) average variable cost; increases producer surplus
If goods A and B are considered substitutes, a decrease in the price of A would cause
A. a movement along the demand curve for B to a (lower price, higher quantity) point. B. the demand curve for B to shift to the left. C. a movement along the demand curve for B to a (higher price, lower quantity) point. D. the demand curve for B to shift to the right.