The interest-rate-based monetary policy transmission mechanism argues that an increase in the money supply
A) has no effect on aggregate demand but reduces long-run aggregate supply.
B) has no effect on aggregate demand but increases short-run aggregate supply.
C) causes interest rates to fall, which causes an increase in planned investment, and an increase in aggregate demand.
D) causes the inflation rate to decline, which causes an increase in household consumption spending and an increase in aggregate demand.
C
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The above figure shows the market for biologists. The government decides to set a minimum wage for biologists of $18 per hour. After this minimum wage is in effect, the deadweight loss equals ________
A) $400 B) $200 C) $800 D) $1600 E) $100
Refer to Table 19-24. Suppose that a very simple economy produces three goods: pizzas, haircuts, and backpacks. Suppose the quantities produced and their corresponding prices for 2011 and 2016 are shown in the table above
Use the information to compute real GDP in the year 2011 and 2016. Calculate real GDP in 2016 assuming the base year is 2011. Do the same calculation assuming the base year is 2016. Are the calculations different? Why?