The Keynesian cause-and-effect sequence predicts that a decrease in the money supply will cause interest rates to:
a. fall, boosting investment and shifting the AD curve rightward, leading to an increase in real GDP.
b. fall, boosting investment and shifting the AD curve rightward, leading to a decrease in real GDP.
c. rise, cutting investment and shifting the AD curve rightward, leading to an increase in real GDP.
d. rise, boosting investment and shifting the AD curve rightward, leading to an increase in real GDP.
e. rise, cutting investment and shifting the AD curve leftward, leading to a decrease in real GDP.
e
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Most of the pressure for a monetary growth rule has disappeared because since 1980,
A) the relationship between movements in the money supply and movements in real GDP and the price level have become much weaker. B) the relationship between movements in the money supply and movements in real GDP and the price level have become much stronger. C) the relationship between movements in interest rates and movements in real GDP and the price level have become much weaker. D) the relationship between movements in interest rates and movements in real GDP and the price level have become much stronger.
In the above figure, at the profit-maximizing rate of production for the perfectly competitive firm total revenue is
A) $100. B) $70. C) $30. D) $130.