1. In the labor market, an income tax (i.e., the effect of a tax wedge) will result in ____________________________________.

Group of answer choices

an increase in the full-employment quantity of labor and an increase in potential GDP

increased deficit spending

crowding out in the labor market

a decrease in the full-employment quantity of labor and a decrease in potential GDP

2. The three main influences of money demand (MD; i.e., shift factors) include all of the following EXCEPT:

Group of answer choices

The price level

Real GDP

The nominal interest rate

Financial technology

3. The quantity theory prediction is that in the long run ___________________________________________.

Group of answer choices

the change in the price level is proportional to the change in the quantity of money

the change in the velocity of circulation is proportional to the change in the quantity of money

the change in real GDP is proportional to the change in the quantity of money

the change in nominal GDP is proportional to the change in the quantity of money