If the demand for money was totally independent of the interest rate, the LM curve would ________ and monetary policy would ________
A) have a positive slope, quite powerful
B) have a positive slope, impotent
C) be vertical, quite powerful
D) be vertical, impotent
C
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Referring to the previous question, all else constant, a 5 unit increase in the wage index would cause:
A) quantity supplied to increase by 9 units and be shown by a movement up the supply curve. B) quantity supplied to decrease by 9 units and be shown by a movement down the supply curve. C) quantity supplied to increase by 9 units and be shown by a rightward shift of the supply curve. D) quantity supplied to decrease by 9 units and be shown by a leftward shift of the supply curve.
The government redistributes income to the poor, primarily through
A. regressive taxes and disability payments. B. transfer payments and progressive taxes. C. government purchases. D. higher wages.