In the short run, an increase in government expenditure will...
I. shift the aggregate demand curve rightward
II. increase real GDP
III. increase the government expenditure multiplier
IV. increase the tax multiplier
a) I & II
b) I & III
c) I, II, & III
d) III & IV
a) I & II
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The above figure illustrates a perfectly competitive firm. If the market price is $10 a unit, to maximize its profit (or minimize its loss) the firm should
A) shut down. B) produce between 10 and less than 30 units. C) produce 30 units. D) produce more than 30 units and less than 40 units. E) produce 40 units.
The process of money creation can be reversed:
a. when a person pays a loan back to a bank b. when the government passes a law against it. c. when customers begin to deposit money into banks. d. when loans are extended to customers.