Tobacco could not be grown in England. It could only be produced in the colonial South
Indicate whether the statement is true or false
True
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Refer to the above figure. The government has just engaged in expansionary fiscal policy shifting the aggregate demand curve from AD1 to AD2. Interest rates have started to rise. Which of the following statements is TRUE in the short run?
A) Real GDP will be $14 trillion since the effect of government spending is not influenced by interest rates. B) Real GDP will end up somewhere between $11 and $14 trillion as businesses and consumers reduce their spending in response to the increase in interest rates. C) Real GDP will go beyond $14 trillion as businesses and consumers react to the increase in interest rates. D) Real GDP will fall back to $11 trillion since the effect that increased government spending has on real GDP is short lived.
Which of the following have to be true about functions in the duality picture:
A. The expenditure function is homogeneous of degree 1 in prices. B. The compensated demand functions are homogeneous of degree 1 in prices. C. The uncompensated demand functions are homogeneous of degree 1 in prices. D. Both (a) and (b). E. Both (b) and (c). F. Both (a) and (c). G. All of the above. H. None of the above.
Which of the following would cause an increase in the velocity of money?
a. An increase in the use of credit cards b. An increase in the money supply c. An increase in the demand for money d. A decrease in the rate of interest e. A decrease in nominal GDP and a constant money supply
When a binding price floor is imposed on a market, a. price no longer serves as a rationing device
b. the quantity demanded at the price floor exceeds the quantity that would have been demanded without the price floor. c. all sellers benefit. d. All of the above are correct.