A decrease in the money supply
a. lowers the interest rate, causing a decrease in investment and a decrease in GDP.
b. lowers the interest rate, causing a decrease in investment and an increase in GDP.
c. raises the interest rate, causing an increase in investment and a decrease in GDP.
d. raises the interest rate, causing an increase in investment and an increase in GDP.
e. raises the interest rate, causing a decrease in investment and a decrease in GDP.
E
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The primary deficit is equal to
A) outlays - tax revenues. B) government purchases + transfers + net interest - tax revenues. C) outlays + net interest - tax revenues. D) government purchases + transfers - tax revenues.
If a natural monopoly decreases the quantity of output it produces, then:
A. it will have to decrease its price. B. its average cost will decrease. C. its profit will increase. D. its average cost will increase.
Which of the following is not a necessary characteristic of money?
A. Available in unlimited supply B. Divisible C. Durable D. Difficult to counterfeit
Relative percentage changes are used in measuring price elasticity of demand, so that
A. we always obtain a positive number. B. it does not matter whether price increases or decreases when calculating the elasticity. C. it does not matter what units are used to measure prices or quantities. D. larger numbers indicate greater responsiveness.