If the interest elasticity of money demand is -0.1, by what percent does money demand change if the nominal interest rate rises from 2% to 3%?
A. -5%
B. 0%
C. -0.1%
D. 5%
Answer: A
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Refer to the table above. Net exports equal
A) -$2,800 billion. B) $2,800 billion. C) $200 billion. D) -$200 billion. E) $400 billion.
In the figure above, if the market is at equilibrium, then the total consumer surplus equals the area ________ and the total producer surplus equals the area ________
A) A; B B) B; C C) C; B D) A; C E) A + B; C
(Advanced analysis) In a private closed economy, (a) the marginal propensity to save is 0.25, (b) consumption equals income at $120 billion, and (c) the level of investment is $40 billion. What is the equilibrium level of income?
A. $280 billion. B. $320 billion. C. $262 billion. D. $198 billion.
Government prohibition of advertising cigarettes on television would most likely result in
A) a rightward shift in the demand curve for cigarettes. B) a leftward shift in the demand curve for cigarettes. C) a rightward shift in the demand curve for television advertising time. D) no change in the market for either cigarette or television advertising.