Which of the following statements identifies a similarity between optimization in levels and optimization in differences?
A) Both techniques consider only the costs of different alternatives.
B) Both techniques consider only the total benefits of different alternatives.
C) Both techniques evaluate the total net benefit of different alternatives to arrive at a decision.
D) Both techniques require the conversion of all costs and benefits into a common unit of measurement.
D
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When the AE line lies above the 45° line,
A) real GDP exceeds aggregate planned expenditure. B) there are unplanned increases in inventories. C) aggregate planned expenditure is less than real GDP. D) the price level is rising. E) there are unplanned decreases in inventories.
When the price of a cup of coffee falls from $3.00 to $2.50, the quantity demanded increases from 1,000 per month to 1,150 per month. Using the midpoint method, the price elasticity of demand is
A) 0.77. B) 1.30. C) 0.07. D) 3.00. E) 2.50.
The table above shows the balance sheet for Ralph's Bank. If the desired reserve ratio is 15 percent, Ralph's Bank has desired reserves of ________
A) $375 B) $2,500 C) $500 D) $450
A rising rate of inflation: a. makes people more willing to hold money as an asset
b. reduces the usefulness of money as a store of value and thus increases the velocity of money. c. increases the usefulness of money as a medium of exchange and thus reduces the velocity of money. d. is usually preceded by a reduction in the money supply. e. does not have any effect on the velocity of money.