In an oligopoly, the price effect is:
A. the increase in price from lowering the quantity sold.
B. the decrease in total revenue that occurs because the increase in quantity will push the market price down.
C. the increase in output that comes from raising the price.
D. the increase in total revenue due to the money brought in by the sale of additional units.
Answer: B
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A) is greater than 1.0. B) is equal to 1.0. C) is less than 1.0. D) is infinite.
A weakness of the simple Keynesian model is that it does not recognize that because the transactions demand for money __________ as income increases, the interest rate __________ as income rises
A) increases; increases B) increases; decreases C) decreases; increases D) decreases; decreases
In U.S. history, use of a commodity-backed paper currency is associated with the
A) Free Banking Era. B) Confederacy during the Civil War. C) gold standard. D) Bretton Woods Agreement.
In the forex, the demand for dollars will increase if:
A. foreigners wish to buy U.S. goods. B. foreigners wish to sell U.S. financial assets. C. interest rates are lower in the U.S. relative to interest rates abroad. D. interest rates are equal in the US and abroad.