Z is a normal good. The equilibrium price and quantity of Z in the year 2011 was $25 and 60 units, respectively. In 2014, the equilibrium price of Z had increased to $35 and the equilibrium quantity had increased to 70 units
Other things remaining the same, which of the following could explain this change? A) Shift of the supply curve of Z to the left
B) Shift of the supply curve of Z to the right
C) Shift of the demand curve for Z to the left
D) Shift of the demand curve for Z to the right
D
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A naïve implication of the DD-AA framework is that either fiscal or monetary policy can lead to full employment. Discuss why this view is naïve
What will be an ideal response?
Why does the money multiplier measure potential money creation rather than guaranteed money creation?
a. Borrowers may spend all the money they acquire through a loan. b. The money is not real until it is deposited or spent. c. Some banks may choose to keep some of their new deposits in their reserves. d. Borrowers may deposit their loan money into checkable rather than demand deposits.