An increase in money supply causes the real interest rate to ________ and output to ________ in the short run, before prices adjust to restore equilibrium.
A. rise; rise
B. rise; fall
C. fall; rise
D. fall; fall
Answer: C
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The individual firm's demand curve under conditions of perfect competition is
a. perfectly horizontal b. perfectly vertical c. upward sloping d. downward sloping e. nonexistent in perfect competition
Assume that Michaela purchases $12,000 worth of a stock. To do so she uses $2,000 of her own money and borrows the remaining $10,000 at an 8.0% interest rate. If the stock's value increases by 20% in one year and she sells the stock at that time, what is her rate of return?
a. 13% b. 16% c. 20% d. 80%
The most commonly used metric for measuring the value of a national economy is:
A. gross national income, or GNI. B. gross national product, or GNP. C. gross domestic product, or GDP. D. gross domestic income, or GDI.
Suppose that in 2008, Ford sold 500,000 Mustangs at an average price of $18,800 per car; in 2009, 600,000 Mustangs were sold at an average price of $22,500 per car. These statements:
A. suggest that the demand for Mustangs decreased between 2008 and 2009. B. suggest that the demand for Mustangs increased between 2008 and 2009. C. constitute an exception to the law of demand in that they suggest an upsloping demand curve. D. suggest that the supply of Mustangs must have increased between 2008 and 2009.