If the interest elasticity of money demand is -0.1, by what percent does money demand change if the nominal interest rate rises from 2% to 3%?
A) -0.1%
B) 5%
C) 0%
D) -5%
D
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Suppose that aggregate demand increases along the upward sloping portion of the aggregate supply curve. What is the result?
A) Real GDP increases more than nominal GDP increases. B) Nominal GDP and real GDP increase by the same amount. C) Nominal GDP increases more than real GDP increases. D) Nominal GDP and real GDP decrease by the same amount.
The demand curve can be derived from indifference curves by varying the price of the commodity in question
a. True b. False Indicate whether the statement is true or false
According to Baumol and Blinder, does the U.S. economy have a self-correcting mechanism?
a. No, there is no such thing in reality. b. Yes, and it works very rapidly. c. Yes, and it works very slowly. d. No, unless the aggregate supply curve is perfectly flat.
A price-taker firm will tend to expand its output so long as its
a. marginal revenue is positive. b. marginal revenue is greater than the market price. c. marginal revenue is less than the market price. d. marginal cost is less than the market price.