According to liquidity preference theory, a decrease in the price level shifts the
a. money demand curve rightward, so the interest rate increases.
b. money demand curve rightward, so the interest rate decreases.
c. money demand curve leftward, so the interest rate decreases.
d. money demand curve leftward, so the interest rate increases.
c
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Thailand's experience with pegging the baht to the dollar failed because the baht was ________ relative to the dollar, and China's experience with pegging the yuan to the dollar has run into difficulties because the yuan has been ________ relative to
the dollar. A) overvalued; undervalued B) undervalued; undervalued C) undervalued; overvalued D) overvalued; overvalued
All of the following are true, except
a. Some consumers may infer high quality from high price b. Low prices can indicate lower quality given that no other information is available c. Promotional campaigns do not affect consumer's perception on quality d. It makes more sense to raise price when advertising makes demand less elastic
If an increase in the excise tax imposed on cigarettes pushes the price per pack up by 20 percent, and the quantity sold declines by 8 percent as a result, the price elasticity of demand for cigarettes is equal to
a. -0.2. b. -0.4. c. -0.8. d. -5.
In the long run, equilibrium for a monopolist is when
A. the short-run and long-run average cost curves are at their lowest points. B. the short-run average cost curve is at its lowest point. C. the long-run average cost curve is at its lowest point. D. None of these is necessarily true.