A point on a demand curve indicates:
a. A combination of two consumer goods which buyers will choose at given prices
b. A particular price and the corresponding quantity demanded by consumers
c. The ratio of the selling price to the buying price
d. A situation where the buying and selling decisions of consumers and producers are consistent
Answer: b. A particular price and the corresponding quantity demanded by consumers
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The M1 definition of the money supply includes all of the following EXCEPT
A) savings accounts. B) transaction deposits. C) currency. D) travelers checks.
An important market for overnight borrowing and lending is the
A) commercial paper market. B) repo market. C) Treasury bill market. D) Treasury bond market.
The debt-to-GDP ratio decreases when the primary deficit ________ or when seigniorage ________
A) increases; increases B) increases; decreases C) decreases; increases D) decreases; decreases
Assume that the government increases spending and finances the expenditures by borrowing in the domestic capital markets. If the nation has low mobility international capital markets and a flexible exchange rate system, what happens to the quantity of real loanable funds per time period and the nominal value of the domestic currency in the context of the Three-Sector-Model?
a. The GDP Price Index rises, and nominal value of the domestic currency falls. b. The GDP Price Index falls, and nominal value of the domestic currency rises. c. The GDP Price Index rises, and nominal value of the domestic currency remains the same. d. The GDP Price Index rises, and nominal value of the domestic currency rises. e. There is not enough information to determine what happens to these two macroeconomic variables.