Which of the following is not an example of derived demand?
a. As more high school graduates go on to college, more professors are hired.
b. As consumers buy more computers, they demand more powerful computers as they become available.
c. As people let their hair grow longer, fewer people become barbers.
d. As people buy more tennis shoes instead of sandals, they buy more shoe laces.
e. Increased demand for overnight delivery speeds up orders for new delivery trucks.
B
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In the long run, the real interest rate is 3 percent, real GDP grows at 4 percent, velocity is constant, and the quantity of money grows at 8 percent. The nominal interest rate is
A) 7 percent. B) 12 percent. C) 10 percent. D) 8 percent. E) 6 percent.
A good that takes up a very large percentage of the consumer's budget will tend to have
a. an elastic demand b. a perfectly elastic demand c. an inelastic demand d. an upward-sloping demand curve e. very many substitutes
People who receive the benefit of a good without contributing to its costs of production are called
a. contributors in kind. b. free riders. c. frequent flyers. d. cost maximizers.
Which of the following is the most important protection against fears of bank collapse?
A. the Federal Reserve B. the Federal Reserve Open Market Committee C. the Federal Deposit Insurance Corporation D. the gold and silver that backs Federal Reserve notes