If money demand is extremely sensitive to changes in the interest rate, the money demand curve becomes almost horizontal. If the Fed expands the money supply under these circumstances, then the interest rate will
A) change very little and investment and consumer spending will change very little.
B) rise substantially and investment and consumer spending will rise substantially.
C) fall substantially and investment and consumer spending will fall substantially.
D) fall substantially and investment and consumer spending will change very little.
A
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The growth of GDP may understate changes in the economy's economic well-being over time if the ________.
A. amount of leisure decreases B. quality of products and services improves C. environment deteriorates because of pollution D. distribution of income becomes increasingly unequal
The multiplier can be expressed as the ratio of the change in Y over the change in I
a. True b. False Indicate whether the statement is true or false
What happens to the price and quantity sold of a drug when its patent runs out? (i) The price will fall. (ii) The quantity sold will fall. (iii) The marginal cost of producing the drug will rise
a. (i) only b. (i) and (ii) only c. (ii) and (iii) only d. (i), (ii), and (iii)
Harold Brown runs a company that sells encyclopedia sets for $250 each. When he employs 10 workers, they can sell 60 sets per week, while only 54 sets are sold when 9 workers are employed. What is the weekly marginal revenue product of the tenth worker?
A. $250. B. $1,250. C. $1,500. D. $15,000.