If velocity is more stable than the IS curve, then targeting the money supply
a. will be effective in stabilizing the LM curve and interest rates.
b. has the same effects as targeting interest rates.
c. will be less effective in stabilizing aggregate demand than targeting interest rates.
d. is not possible.
B
Economics
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A country which incurs a current account deficit will most likely have a financial or capital account surplus
Indicate whether the statement is true or false
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If the wage rate rises, then the firm's long-run marginal costs change, which in turn affects the firm's output level and its employment of labor. This phenomenon is known as
a. the substitution effect. b. the scale effect. c. the regressive-factor effect. d. the factor-price effect.
Economics