Which of the following will not cause the aggregate demand curve to shift?
a. an increase in government spending for interstate highways
b. an increase in the sales of exports resulting from a change in the exchange rate
c. a change in the price level
d. an increase in the purchase of capital goods caused by a change in expectations
e. a decrease in the construction of new houses caused by an increase in interest rates
C
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A monopolistically competitive firm faces a relatively less elastic demand curve than a monopolist
a. True b. False Indicate whether the statement is true or false
Assume the required reserve ratio is 20 percent and the FOMC orders an open market purchase of $100 million in government securities from member banks. If the oversimplified money multiplier is assumed, then the money supply will
a. increase by $500 million. b. increase by $100 million. c. decrease by $100 million. d. decrease by $500 million.