Explain seignorage
What will be an ideal response?
The real revenue from money creation is called seignorage. It is equal to the money creation divided by the price level.
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If a good is scarce
A) some criteria must be established to determine who gets what. B) its price is above the market-clearing level. C) its price is below the market-clearing level. D) the quantity demanded is greater than the quantity supplied. E) the supply is less than the demand.
Refer to Figure 27-12. An increase in government purchases of $200 billion causes aggregate demand to shift ultimately from AD1 to AD2
Assuming a constant price level, the difference in real GDP between point A and point B will be ________ $200 billion. A) less than B) equal to C) greater than D) There is insufficient information given here to draw a conclusion.