The Keynesian cause-and-effect sequence predicts that a decrease in the money supply will cause interest rates to:
A. fall, boosting investment and shifting the AD curve rightward, leading to an increase in real GDP.
B. fall, boosting investment and shifting the AD curve rightward, leading to a decrease in real GDP.
C. rise, cutting investment and shifting the AD curve leftward, leading to a decrease in real GDP.
D. rise, boosting investment and shifting the AD curve rightward, leading to an increase in real GDP.
Answer: C
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Suppose the equilibrium price of movie tickets is $10. If the supply curve for movies shifts ________, the equilibrium price will ________
A) rightward; decrease B) leftward; decrease C) rightward; increase D) leftward; not change E) rightward; not change
Refer to Figure 13-1. Ceteris paribus, a decrease in firms' expectations of the future profitability of investment spending would be represented by a movement from
A) AD1 to AD2. B) AD2 to AD1. C) point A to point B. D) point B to point A.