When the feedback effects from income to the money market are included,
a. a given change in the money supply will cause a smaller change in the quantity of money demanded.
b. a given change in the money supply will cause a larger change in the interest rate
c. given change in the money supply will cause no change in the interest rate
d. a given change in the money supply will cause a smaller change in the interest rate
e. a given change in the money supply will cause a larger change in the quantity of money demanded.
D
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Government spending affects aggregate demand directly, and tax changes affect aggregate demand indirectly. Therefore, changes in
a. taxes are ineffective in changing aggregate demand. b. government spending affect aggregate demand more quickly than changes in taxes. c. taxes are virtually useless as a stabilization tool. d. government spending should be used with great caution.
Which of the following statements is false?
A) When marginal cost equals average total cost, average total cost is at its highest value. B) The marginal cost curve intersects the average variable cost curve and the average total cost curve at their minimum points. C) The difference between average total cost and average fixed cost is average variable cost. D) Firms often refer to the process of lowering average fixed cost as "spreading the overhead."