When the Fed unexpectedly decreases the money supply,
a. real interest rates will tend to decline.
b. the exchange rate value of the dollar will tend to appreciate.
c. aggregate demand will tend to increase.
d. there is generally no impact on the economy.
B
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Why do some people think that the productivity slowdown since 1973 is just a return to normalcy after fast productivity growth during the previous 25 years?
A) Productivity growth of the previous 25 years was abnormally low. B) The Great Depression and World War II had prevented technological opportunities from being exploited. C) The United States is the only country to face the slowdown, due to poor regulatory decisions. D) The United States has allowed countries like Japan to steal its technological breakthroughs.
The term “laissez-faire” was given to a system of free markets by
A. twentieth-century American economists. B. a seventeenth-century Scottish economist. C. eighteenth-century French economists. D. nineteenth-century Italian economists.
Refer to the graph shown. Assuming that the industry operates under conditions of perfect competition and that the cost curves do not shift, the price of construction in a long-run competitive equilibrium will be:
A. $55 per square foot. B. $60 per square foot. C. $50 per square foot. D. In the long run no construction will be supplied at any price.
In an economy, households receive a total income of $5 million. Of this, $3.5 million are wages received for labor services, $1 million are rental payments, and $250,000 are interest payments received. In this economy, what are the costs of production and profits equal to respectively?
A. $7.25 million; $250,000 B. $5 million; $500,000 C. $7.75 million; $0 D. $5 million; $250,000