An increase in the price level causes government spending to:
A. increase in social welfare spending only.
B. decrease.
C. remain unaffected.
D. increase.
Answer: C
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You are just about to finish college and are about to start a high paying job. Because of this new job, what is the most likely outcome in the market for cars?
A) Your demand for cars will increase. B) The market supply of cars will decrease. C) The demand and the supply for cars will decrease. D) Your demand for cars will decrease. E) The market supply of cars will increase.
Using the money demand and money supply model, an increase in money demand would cause the equilibrium interest rate to
A) increase. B) decrease. C) not change. D) increase, then decrease.
Refer to Figure 3-5. At a price of $5, the quantity sold
A) is 2 units. B) is 4 units. C) is 6 units. D) cannot be determined.
One result of asymmetric information in the market for used cars is that few lemons are sold
a. True b. False