The evidence on the interest sensitivity of the demand for money suggests that the demand for money is ________ to interest rates, and there is ________ evidence that a liquidity trap exists
A) sensitive; substantial
B) sensitive; little
C) insensitive; substantial
D) insensitive; little
B
You might also like to view...
According to Prebisch and other ISI theoreticians, countries should begin to shift their comparative advantage away from primary commodity production by first producing
A) industrial goods such as pumps and generators. B) complex consumer goods such as autos and appliances. C) advanced industrial goods such as chemical and electronics. D) simple consumer goods such as food products and textiles. E) minerals and agricultural products.
Suppose a worker in Argentina can produce either 20 units of cloth or 2 bottles of wine per day, while a worker in Chile can produce either 24 units of cloth or 12 bottles of wine per day. If Argentina transfers 2 units of labor from wine to cloth and Chile transfers 1 unit of labor from cloth to wine, the combined output will be:
a. 16 bottles of wine and 8 units of cloth. b. 16 bottles of wine and 16 units of cloth. c. 12 bottles of wine and 12 units of cloth. d. 8 bottles of wine and 16 units of cloth.
Why is voluntary exchange an important source of economic prosperity?
A) All of the above are correct. B) It makes it possible to produce a larger output as a result of gains from division of labor and specialization. C) It makes it possible to produce a larger output as a result of lower per unit costs that often accompany large-scale production. D) It moves goods from people who value them less to people who value them more.
Refer to the above figure. A budget deficit occurs when real national income is
A. Y3. B. Y1. C. Y2. D. None of these: cannot be determined given the information.