An increase in the price of steak will probably lead to:
A. an increase in demand for steak.
B. no change in the demand for steak or chicken.
C. an increase in demand for chicken.
D. an increase in the supply for chicken.
Answer: C
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A vertical demand curve for a particular good implies that consumers are
A) sensitive to changes in the price of that good. B) not sensitive to changes in the price of that good. C) irrational. D) not interested in that good.
Suppose Winston's annual salary as an accountant is $60,000, and his financial assets generate $4,000 per year in interest. One day, after deciding to be his own boss, he quits his job and uses his financial assets to establish a consulting business, which he runs out of his home. To run the business, he outlays $8,000 in cash to cover all the costs involved with running the business, and earns revenues of $150,000. What are Winston's explicit costs?
A. $64,000 B. $72,000 C. $8,000 D. $12,000
Suppose a hefty rise in the demand for Mexican pesos creates a chronic shortage of this currency in the foreign exchange market. Which of the following steps should be adopted by the Mexican government to eliminate this shortage?
a. The government should impose a ban on Mexican exports. b. The government should devalue the peso. c. The government should print more pesos to increase its supply. d. The government should allow the peso to appreciate. e. The government should allow the peso to depreciate.
When comparing the Keynesian and monetarist approaches, the only substantive difference is that
a. the Keynesian equation leads to a prediction of real GDP; the monetarist equation leads to a prediction of nominal GDP. b. Keynesians concentrate on aggregate demand and monetarists concentrate on aggregate supply. c. Keynesians approach aggregate demand by multiplying the money supply by velocity, while monetarists use the equilibrium conditions of the expenditure schedule. d. Keynesian analysis suggests that money affects consumption first while monetarist analysis suggests that money affects investment spending first.