If the firm in the diagram lowers price from P 1 to P 2 , it will:
A. lose P 1 P 2 ba in revenue from the price cut but increase revenue by Q 1 bcQ 2 from the
increase in sales.
B. lose P 1 P 2 ca in revenue from the price cut but increase revenue by Q 1 acQ 2 from the
increase in sales.
C. incur a decline in total revenue because it is operating on the elastic segment of the
demand curve.
D. incur an increase in total revenue because it is operating on the inelastic segment of the
demand curve.
A. lose P 1 P 2 ba in revenue from the price cut but increase revenue by Q 1 bcQ 2 from the
increase in sales.
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Nominal GDP is greater than GDP because of the effects of inflation as measured by the GDP chain price index
a. True b. False Indicate whether the statement is true or false
Which of the following expresses the equation of exchange?
A. MP = VY B. MV = PY C. MV = Y D. MY = PV
The purchase of VCU2 by Tomas Tiergarten, a private resident, causes the nation's:
a. M2 money multiplier to remain the same. b. M2 money supply to rise. c. M2 money multiplier to rise. d. Monetary base to rise.
Suppose supply decreases, but there is no change in demand. As the market reaches its new equilibrium:
A. excess supply will lead the price to fall. B. excess demand will lead the price to fall. C. excess supply will lead the price to rise. D. excess demand will lead the price to rise.