The transactions motive links money demand and
A) interest rates.
B) money supply.
C) the liquidity trap.
D) income.
D
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An adverse supply shock shifts the short-run Phillips curve to the
a. right. This means the unemployment rate is higher at each inflation rate. b. right. This means the unemployment rate is lower at each inflation rate. c. left. This means the unemployment rate is higher at each inflation rate. d. left. This means the unemployment rate is lower at each inflation rate.
Table 5.1National Income Accounts (dollar figures are in billions)Expenditures for consumer goods and services$4,565Exports$740Government purchases of goods and services$1,465Social Security taxes$510Net investment$225Indirect business taxes$520Imports$825Gross investment$865Corporate income taxes$185Personal income taxes$750Corporate retained earnings$45Net foreign factor income$20Government transfer payments to households$690Net interest payments to households$0On the basis of Table 5.1, personal saving is
A. $6,445 billion. B. $5,790 billion. C. $5,620 billion. D. $6,530 billion.
In 1963, government economists assumed that the MPC for the United States was approximately 0.90. If taxes were cut by $9 billion, then consumer expenditures would initially be expected to
A. decrease by $9.0 billion. B. increase by $9.0 billion. C. decrease by $8.1 billion. D. increase by $8.1 billion.
Comment on the following statement: "The market demand for public goods is derived in the same way that the market demand for private goods is derived."
What will be an ideal response?