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If households in the economy decide to take money out of checking account deposits and put this money into savings accounts, this will initially
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- bThe long-run effect of higher government budget deficits on the equilibrium annual flow of real GDP is zero. Who, therefore, benefits in the long run from higher government deficits?Those who benefit in the long run from higher budget deficits areA.those who receive the larger share of the annual flow of real GDP to government-provided goods and services—that is, those to whom these goods and services are not redistributed.B.those who receive the larger share of the annual flow of real GDP to government-provided goods and services—that is, those to whom these goods and services are redistributed.C.those who receive the smaller share of the annual flow of real GDP to government-provided goods and services—that is, those to whom these goods and services are redistributed.D.those who receive the smaller share of the annual flow of real GDP to government-provided goods and services—that is, those to whom these goods and services are not redistributed
- Suppose you decide to withdraw $100 in currency from your checking account.What is the effect on M1? Ignore any actions the bank may take as a result of your having withdrawn the $100.
- Refer to the economy shown in the graph to the right. Suppose that there is an increase in oil prices.The short-run effect of this change on the economy isA.a leftward shift of the AD curve, and demand-pull inflation.B.a rightward shift of the SRAS curve, and cost-push inflation.C.a rightward shift of the AD curve, and demand-pull inflation.D.a leftward shift of the SRAS curve, and cost-push inflation.E.none; changes in prices have no effect on the economy in the short run.