How is the market demand curve for new capital derived?
What will be an ideal response?
The market demand curve for new capital is the sum of all of the individual demand curves for new capital in the economy. It represents the level of total investment undertaken by all firms at every interest rate.
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Suppose the elasticity of labor demand is 0.6. Then a decrease in the wage rate will:
A. Decrease total wage income B. Increase total wage income C. Have no impact on total wage income D. Have an indeterminate impact on total wage income
The price of a computer in the United States is $1,000. The price of a car in Germany is 10,000 euros. The current exchange rate is 0.9 euros per dollar
a) If a computer is exported from the United States to Germany with no barriers to trade, what will be the price of the computer in Germany? b) If a car is imported to the United States from Germany with no barriers to trade, what will be the price of the car in the United States? c) Suppose the dollar appreciates by 10 percent against the euro. How will the price of a computer exported from the United States change in Germany? d) Suppose the dollar appreciates by 10 percent against the euro. How will the price of a car imported to the United States from Germany change in the United States?
An increase in income causes the demand for inferior goods to_____________ and the price of inferior goods to ____________
a. Increase; increase b. Increase; decrease c. Decrease; increase d. Decrease, decrease
A system that permits banks to hold less than 100 percent of their deposits as reserves is called a
a. federal reserve system. b. fractional reserve banking system. c. partially funded deposit insurance system. d. gold standard banking system.