Suppose the demand for money and the supply of money increase simultaneously. We can:
A. expect the interest rate to rise and bond prices to fall.
B. expect the interest rate to fall and bond prices to rise.
C. the nominal GDP to expand.
D. not accurately predict what will happen to interest rates or bond prices.
D. not accurately predict what will happen to interest rates or bond prices.
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Monopolistically competitive firms achieve allocative efficiency but not productive efficiency
Indicate whether the statement is true or false
Assume the income elasticity of a good has been calculated to be +0.83. Based on this information, we can infer that the good is:
A) a normal good and a luxury. B) an inferior good and a necessity. C) a normal good and a necessity. D) an inferior good and a luxury.
In Keynes's liquidity preference framework, as the expected return on bonds increases (holding everything else unchanged), the expected return on money ________, causing the demand for ________ to fall
A) falls; bonds B) falls; money C) rises; bonds D) rises; money
The greater the availability of close substitutes for a product, the greater the price elasticity of demand for that product
a. True b. False