Which of the following are key components of a contractionary money policy?
a. Interest rates rise; equilibrium money demanded increases; decrease in aggregate demand.
b. Interest rates rise; equilibrium money demanded decreases; decrease in aggregate demand.
c. Interest rates fall; equilibrium money demanded increases; decrease in aggregate demand.
d. Interest rates fall; equilibrium money demanded increases; increase in aggregate demand.
b. Interest rates rise; equilibrium money demanded decreases; decrease in aggregate demand.
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A monopoly sets its price such that demand for the good produced is ______
A. unit elastic B. inelastic C. elastic D. either elastic or inelastic, but never unit elastic
If wages decrease and workers choose to work more hours or more shifts, their behavior is evidence of
a. the substitution effect. b. the income effect. c. rational expectations. d. rational ignorance.
If the price rises and the total amount consumers spend on the good remains unchanged, then demand must be
A. elastic. B. perfectly inelastic. C. unit elastic. D. inelastic.
The ________ broadly a market is defined, the more difficult it becomes to find ________.
A. more; substitutes B. less; goods independent of each other C. more; complements D. less; substitutes