Other things the same, an increase in the price level makes the dollars people hold worth
a. more, so they can buy more.
b. more, so they can buy less.
c. less, so they can buy more.
d. less, so they can buy less.
d
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Suppose we have normally-sloped IS and LM curves intersecting at point A. Then a monetary policy change shifts the LM curve to the right. Directly below point A we find a point on the new LM curve that shows us
A) where the new IS-LM equilibrium occurs. B) how much the interest rate must fall to raise planned expenditures to the new equilibrium income. C) how much the interest rate must fall to by itself raise the demand for money by as much as the money supply has decreased. D) how much income must rise to by itself raise the demand for money by as much as the money supply has increased. E) how much the interest rate must fall to by itself lower the demand for money by as much as the money supply has decreased.
Federal subsidies to higher education have the effect of
a. increasing the demand for higher education b. increasing the supply of higher education c. decreasing the demand for higher education d. decreasing the supply of higher education
Refer to the figure below. When P = 4, the price elasticity of demand for the demand curve D1 is ________ and D2 is ________. 
A. 1/3; 2/3 B. 2/3; 1/3 C. 3; 3 D. 1/3; 3
Suppose buyers in the used car market are willing to pay $3,500 for a plum (high-quality) used car and $1,500 for a lemon (low-quality) used car. If buyers believe that 30% of the used cars on the market are lemons (low quality), what would they be willing to pay for a used car?
A. $2,000 B. $2,500 C. $2,900 D. $3,500