Using the equation of exchange and assuming fixed price controls and a constant velocity of money, a decrease in the discount rate could temporarily result in
A. Higher quantity of real output.
B. Higher velocity.
C. Higher price level.
D. Lower money supply.
Answer: A
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With a tax of $2,000 on $30,000 of income, and $2,000 on $70,000 of income, we can describe the structure of this tax as
A. progressive. B. marginal. C. regressive. D. proportional.
Jenny's weekly income increases from $500 to $650. As a result, she goes out for dinner one day a week instead of one day every other week. What is Jenny's income elasticity of demand for restaurant dinners?
What will be an ideal response?
It is ________ difficult to effectively time fiscal policy than monetary policy because ________
A) more; fiscal policy can be quickly decided and changed B) more; fiscal policy takes longer to implement C) less; monetary policy takes longer to implement D) less; monetary policy takes longer to decide and change
If the interest rate were to rise, we expect that
A) autonomous expenditures will rise. B) the supply of money will fall. C) the amount of money people want to hold will rise. D) the amount of money people want to hold will fall.