The Compensating Variation for an increase in the price of a good is
A) the minimum amount of money a consumer would accept to voluntarily accept the price increase.
B) the maximum amount of money a consumer would pay to avoid the price increase.
C) the change in consumer surplus resulting from a price increase.
D) the change in utility resulting from the increase in price.
A
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Suppose that in October, market analysts predict that the price of platinum will fall in November. What happens in the platinum market in October, holding everything else constant?
A) The demand curve shifts to the right. B) The supply curve shifts to the right. C) The supply curve shifts to the left. D) The quantity of platinum demanded and the quantity of platinum supplied both increase.
When the exchange rate is allowed to shift gradually over time, or within an exchange rate band which may also shift over time, this is considered a(n):
A) fixed exchange rate. B) managed float. C) flexible exchange rate. D) none of the above.
Identify the comovement (i.e., direction and timing) of the following variables over a business cycle:
(a) industrial production (b) unemployment (c) nominal interest rates (d) nominal money supply growth (e) investment
Money is ________
A) an asset B) a unit of measure C) a tool D) all of the above E) none of the above