The above figure shows the demand curve for movie rentals from Redbox. If Redbox lowered its price from $2.00 to $1.50, then total revenue would ________ because demand is ________
A) decrease; elastic
B) increase; elastic
C) decrease; inelastic
D) increase; inelastic
C
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If fewer families purchase health insurance because of rising health insurance premiums, then health insurance premiums are likely to rise further due to:
A. commitment problems. B. moral hazard. C. adverse selection. D. first-dollar coverage.
The time inconsistency of policy implies that
a. what policymakers say they will do is generally what they will do, but people don't believe them because of current policy. b. when people expect that inflation will be low, it is easier for the Fed to increase output by increasing the money supply. c. people will believe Fed policy will be less inflationary than the Fed claims. d. what policymakers say they will do is usually not what they do, but people believe them anyway.
If, under a fixed exchange rate system, the dollar price of a Mexican peso is below its equilibrium level, then the
A) dollar is overvalued. B) peso is overvalued. C) dollar has depreciated. D) peso has appreciated.
The speed with which money circulates through the economy is called the
A. oversimplified multiplier. B. velocity of circulation. C. exchange rate. D. money multiplier.