Keynesian monetary theory:
a) is the same as the classical theory in all essential elements.
b) states that changes in the money supply have no impact on GDP in either the short or long run.
c) states that an increase in the money supply leads to lower interest rates, which stimulates investment and aggregate demand.
d) states that an increase in the money supply will lower interest rates and thereby shift the long-run aggregate supply curve to the right.
Ans: c) states that an increase in the money supply leads to lower interest rates, which stimulates investment and aggregate demand.
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Suppose that in a closed economy GDP is 11,000, consumption is 7,500, and taxes are 500 . What value of government purchases would make national savings equal to 2,000 and at that value would the government have a deficit or surplus?
a. 1,500, deficit b. 1,500, surplus c. 1,000, deficit d. 1,000, surplus
Based on the fertility-rate calculations for major industrialized countries, their populations are expected to decline significantly in the coming years because the:
A. Total fertility rate is higher than the replacement rate B. Total fertility rate is below the replacement rate C. Fertility rate and the replacement rate are about equal D. Fertility rate divided by the replacement rate is greater than one