Examlex
Suppose the Federal Reserve's short-run response to any change in the economy is to change the money supply to maintain the existing real interest rate.What would happen to money supply if there were a reduction in government purchases? Given the Fed's policy,what would happen in the very short run (before general equilibrium is restored)to output and the real interest rate? What must happen to the LM curve and the price level to restore general equilibrium?
Marginal Revenue Product
The extra income produced by the use of an additional unit of a resource, like labor or capital.
Total Output
The total quantity of goods or services produced by an economic entity in a given period.
Marginal Productivity Theory
An economic theory that suggests the wage or value of a worker's output is equal to the additional production the worker generates.
Resource Demand
The desire and ability of a company or economy to acquire goods or services considered essential for operation.
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