Assume a central bank follows a rule that requires it to take steps to keep the price level constant. If the price level rose because of an increase in aggregate demand and a decrease in aggregate supply that kept output unchanged, then
a. the central bank would have to decrease the money supply which would decrease output.
b. the central bank would have to decrease the money supply which would increase output.
c. the central bank would have to increase the money supply which would decrease output.
d. the central bank would have to increase the money supply which would increase output.
a
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Refer to Figure 3.1. A Nash Equilibrium occurs where
A) Homer confesses to committing the crime and Marge denies committing the crime. B) Marge confesses to committing the crime and Homer denies committing the crime. C) Homer and Marge both confess to committing the crime. D) Homer and Marge both deny committing the crime.
If the MPC is 0.9 and the tax rate is 15%, a $100 increase in autonomous investment will increase equilibrium income by
A) $131. B) $426. C) $599. D) $850.