In order A,B,C, or D multiple choice questions.
An increase in money supply will cause the following in the Money Market
decrease in interest rates and decrease in quantity of money |
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decrease in interest rates and increase in quantity of money |
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increase in interest rates and decrease in quantity of money |
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increase in interest rates and increase in quantity of money |
QUESTION 29
Under this idea an increase in prices reduces real wages causing firms to increase production and employment
sticky wage theory |
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misperception theory |
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sticky price theory |
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sticky interest rate theory |
QUESTION 30
Which of the following is not a benefit of efficiency wages?
higher wages reduce worker turnover |
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healthy workers are less productive |
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higher wages make workers more eager to keep their jobs |
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higher wages attract better quality workers |
QUESTION 31
During this part of the business cycle economic activity is at its lowest; real GDP is at a minimum; employment, profits, and productive capacity use are low.
expansion phase |
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peak phase |
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trough phase |
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recession phase |
QUESTION 32
An increase in natural resources will lead to the following:
increase in equilibrium price level and increase in equilibrium quantity |
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increase in equilibrium price level and decrease in equilibrium quantity |
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decrease in equilibrium price level and decrease in equilibrium quantity |
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decrease in equilibrium price level and increase in equilibrium quantity |
28) option B is correct. When there is an increase in the money supply, money supply curve will shift out resulting in excess money supplied at the current interest rate. This drives the rate of interest down.
29) option A is correct. Nominal wages are sticky and unchanged in the short run so when there is a price increase the real wages are reduced.
30) option b is not correct. Healthy workers are actually more productive
31) option C is correct. Because it is given that real GDP is at its minimum it should be a trough
32) option d is correct. This will increase the production capacity which means short run and long run aggregate supply curve will shift to the right. Price should be lower and quantity should be higher.
In order A,B,C, or D multiple choice questions. An increase in money supply will cause the...
the quantity theory of money proposes that an increase in money supply will reflect in -increase in the velocity of money -increase in the price level -decrease in the price level -decrease in the output -increase in the output
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