Monetary policy has the largest impact when the money demand curve is ________ and investment demand is ________.
A. downward-sloping; inelastic
B. horizontal; inelastic
C. downward-sloping; elastic
D. horizontal; elastic
Answer: C
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The marginal cost to a grocer of selling avocados, which would have to be thrown away if they are not sold immediately, is approximately
A) the overhead cost per avocado sold. B) the price of replacing the inventory. C) their wholesale purchase price. D) zero.
When the supply of a good is represented by a horizontal line, the burden of a tax is: a. shared equally between the buyers and the sellers. b. placed entirely on the buyers
c. placed entirely on the sellers. d. more on the buyers than on the sellers.
A temporary decrease in the price of oil would be considered a:
A. long-run supply shock. B. demand shock. C. short-run supply shock. D. The changing price of oil would not affect any of these.
During wars the public tends to hold relatively more currency and relatively fewer deposits. This decision makes reserves
a. and the money supply increase. b. and the money supply decrease. c. increase, but leaves the money supply unchanged. d. decrease, but leaves the money supply unchanged.