The market demand curve for denim jeans is Q = 231 - 45 P + 23 I where P is the product price and I is per-capita consumer income. Which of the following statements about this demand function is NOT true?
A) Denim jeans are normal goods.
B) The price elasticity of demand is -45.
C) The demand curve is downward sloping.
D) The Engel curve for this denim jeans is upward sloping.
B
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If the government collects taxes to pay for expenditures of an equal amount, bank reserves
A) are unaffected. B) rise by an equal amount. C) rise by a multiple amount. D) fall by an equal amount.
An increase in government spending that is not financed by an increase in taxes will cause which of the following?
A) an increase in interest rates and an increase in planned investment B) an increase in interest rates and a reduction in planned investment C) a reduction in interest rates and an increase in planned investment D) a reduction in interest rates and a reduction in planned investment
When a transfer price is set higher
a. the profits of the division producing the intermediate product will rise b. the profits of the division producing the intermediate product will fall c. the costs of the division producing the intermediate product will rise d. the costs of the division producing the intermediate product will fall
Contractionary monetary policy
A. tends to lead to a depreciation of a nation's currency. B. usually has no effect on a currency's exchange value. C. tends to lead to an appreciation of the currencies of other nations. D. tends to lead to an appreciation of a nation's currency.