After a price decrease for good X, the new consumer equilibrium level of good X will be:
A. lower than before the price change.
B. indeterminate without more information.
C. the same as before the price change.
D. higher than before the price change.
Answer: B
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The velocity of circulation is the
a. speed at which the multiplier takes effect. b. speed at which money circulates. c. speed at which tax cuts get spent. d. rate at which money creation takes place.
Which of the following will reduce the velocity of circulation of the money stock?
a. The inflation rate increases. b. The interest rate falls. c. Credit cards are used more frequently. d. More employees are paid once a week instead of once a month.
Refer to the above graph. When the quantity of product X sold increases from 14,000 to 16,000, the price elasticity of demand for product X is:
A. perfectly inelastic. B. unit-elastic. C. inelastic. D. elastic.
Suppose that in 2007, Ford sold 500,000 Mustangs at an average price of $18,800 per car; in 2008, 600,000 Mustangs were sold at an average price of $19,500 per car. These statements:
A. suggest that the demand for Mustangs decreased between 2007 and 2008. B. suggest that the supply of Mustangs must have increased between 2007 and 2008. C. suggest that the demand for Mustangs increased between 2007 and 2008. D. constitute an exception to the law of demand in that they suggest an upsloping demand curve.