Which of the following best describes how an increase in the money supply shifts aggregate demand?
A. The money supply shifts right, prices fall, spending increases, and aggregate demand shifts right.
B. The money supply shifts right, the interest rate falls, investment increases, and aggregate demand shifts right.
C. The money supply shifts right, prices rise, spending falls, and aggregate demand shifts left.
D. The money supply shifts right, the interest rate rises, investment decreases, and aggregate demand shifts left.
Ans: B. The money supply shifts right, the interest rate falls, investment increases, and aggregate demand shifts right.
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Real money supply expresses the money supply in terms of real goods and services
Indicate whether the statement is true or false
Isoquants that are downward-sloping straight lines imply that the inputs
A) are perfect substitutes. B) are imperfect substitutes. C) cannot be used together. D) must be used together in varying proportions.
Net total benefits of an activity are maximized when marginal benefits and marginal costs are equal
Indicate whether the statement is true or false
Which of the following is true regarding the market for steak shown in Figure 3-1?
a. If the price of steak were $2 per pound, producers would want to supply less steak than consumers would want to buy. b. If the price of steak were $4 per pound, producers would want to supply more steak than consumers would want to buy. c. If the price of steak were $3 per pound, producers would want to supply the same amount of steak that consumers would want to buy. d. All of the above are true regarding the market for steak shown in the figure.