If the income elasticity of money demand is 3/4 and the interest elasticity of money demand is -1/4, by what percent does money demand rise if income rises 10% and the nominal interest rate rises from 4% to 5%?
A. 6.25%
B. 7.50%
C. 5.00%
D. 1.25%
Answer: D
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Let S = y - (100 + 0.5y). Assume no government or foreign sectors. At the equilibrium level of income, y* = 800, the level of saving is
A) 0. B) 50. C) 100. D) 300.
Which of the following statements best describes the relationship between a stronger currency and exports?
a. A stronger euro discourages exports by a European firm because it makes the costs of production in the domestic currency higher relative to the sales revenues earned in another country. b. A stronger euro encourages exports by a European firm because it makes the costs of production in the domestic currency higher relative to the sales revenues earned in another country. c. A stronger euro discourages exports by a European firm because it makes the costs of production in the domestic currency lower relative to the sales revenues earned in another country. d. A stronger euro encourages exports by a European firm because it makes the costs of production in the domestic currency lower relative to the sales revenues earned in another country.
Which of the following industries has not undergone deregulation in recent years?
a. steel b. telephone c. airlines d. trucking e. banking
The longest period of deflation in the U.S. in the 20th century was during World War II
Indicate whether the statement is true or false