Demand for real money balances depends on ________
A) the price level
B) the real interest rate
C) the opportunity cost of holding money
D) all of the above
E) none of the above
C
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Rayburn Reed is a highly talented photographer. He has chosen to specialize in photography because of all of the following except
A) for him, this is the most lucrative way to purchase the products that he wants to consume. B) his photographs are highly esteemed by art lovers who are willing to pay very high prices. C) he obviously has a comparative advantage in photography. D) his opportunity cost of pursuing another career is very low.
In monopolistic competition, firms may differentiate their products in many ways except on the basis of:
a. quality. b. style. c. price. d. packaging. e. guarantees.
Which of the following is true? a. In equilibrium, with only two countries, the excess demand for loanable funds in one country will equal the excess supply of loanable funds in the other. b. Countries with net capital inflows tend to be few or no capital outflows
c. Capital flows will tend to decrease real interest rates in countries with a capital inflow. d. Both a. and c. are correct.
Both Jones and Smith agree that the economy is in a recessionary gap. Jones proposes a tax cut and believes that it will raise Real GDP and lower the price level. Smith agrees that a tax cut will raise Real GDP, but he argues that it will not lower the price level in the short run. It follows that
A) both Jones and Smith believe that lower taxes will shift the AD curve rightward, but will not shift the SRAS curve. B) both Jones and Smith believe that lower taxes will shift the SRAS curve rightward, but will not shift the AD curve. C) Jones believes that the tax cut will shift the SRAS curve rightward and the AD curve will not shift. Smith believes that the AD curve will shift rightward and the SRAS curve will not shift. D) Smith believes that the tax cut will shift the SRAS curve rightward and the AD curve will not shift. Jones believes that the AD curve will shift rightward and the SRAS curve will not shift.