Assume individuals consider only the short-run effects of changes in future macro variables when forming expectations of future output and future interest rates. A permanent increase in the money supply, with no other policy change implemented or anticipated, will most likely cause
A) an increase in the current interest rate.
B) an increase in future output and an increase in the future interest rate.
C) an unknown effect on the current interest rate.
D) all of the above
E) none of the above
C
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The sacrifices made by societies in order to engage in military spending represent
A) the real costs of military spending. B) the excessive costs of military spending. C) the nominal costs of military spending. D) the opportunity costs of military spending.
The market demand curve in a perfectly competitive market is ________ and the demand curve for a perfectly competitive firm's output is ________
A) downward sloping; downward sloping B) downward sloping; horizontal C) horizontal; downward sloping D) horizontal; horizontal E) downward sloping; upward sloping