Action taken by the Fed to reduce the money supply will tend, all other things unchanged,
A) to reduce investment.
B) to increase investment.
C) to have no effect on net exports.
D) to increase real GDP and the price level.
Ans: A) to reduce investment.
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Whether or not a pooling equilibrium exists in a competitive market with adverse selection depends on what fraction of consumers is of the high cost type and what fraction is of the low cost type.
Answer the following statement true (T) or false (F)
Which of the following is true?
a. Real GDP is a measure of income, but not output. b. Real GDP is a measure of output, but not income. c. Real GDP is a measure of inflation. d. Growth of output is necessary for the growth of income.
The academic studies that were the intellectual justification for Head Start suggested that money spent on early childhood education would be a wise investment because
A. kids deserve a quality education. B. there would be higher taxes paid when these children grew up. C. there would be lower welfare and incarceration costs when these children grew up. D. B) and C).
Which of the following is not a resource as the term is used by economists?
A. money B. land C. labor D. buildings