The Baumol model of money demand strengthens the possibility that the LM curve is
A) horizontal.
B) upward-sloping.
C) vertical.
D) downward-sloping.
B
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According to the law of demand, when the price of a BMW or a Gucci purse increases, the quantity demanded of these goods will also increase because consumers consider them prestigious
a. True b. False Indicate whether the statement is true or false
Opportunity cost can best be defined as
A) the interest cost of financing a business loan at the bank. B) the value of all of the alternatives sacrificed. C) the value of the next-highest-ranked alternative. D) There is no real definition for opportunity cost.
If a tax is imposed per unit of a good sold, ________
A) the supply curve for the good shifts to the right B) the supply curve for the good shifts to the left C) the demand curve for the good shifts to the right D) the demand curve for the good shifts to the left
Refer to the above table. Assuming constant opportunity costs
A) neither country will be willing to engage in trade at any rate of exchange of product A for product B. B) both countries will be willing to engage in trade at a rate of exchange of 0.3 unit of product A for 1 unit of product B. C) both countries will be willing to engage in trade at a rate of exchange of 3 units of product A for 1 unit of product B. D) both countries will be willing to engage in trade at a rate of exchange of 1.5 unit of product A for 1 unit of product B.