Refer to the graph, in which Dt is the transactions demand for money, Dm is the total demand for money, and Sm is the supply of money. The market is initially in equilibrium at a 6 percent rate of interest. If the supply of money increases as shown, then the asset demand for money will increase by:
A. $75
B. $125
C. $200
D. $325
A. $75
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In a closed economy with no government, aggregate expenditure is
A) consumption plus investment. B) saving plus investment. C) consumption plus the MPC. D) MPC + MPS. E) none of the above.
All of the following can be used to compute average profit except
A) marginal profit minus marginal cost. B) average revenue minus average total cost C) total profit divided by quantity. D) price minus average total cost.
"The second glass of Evian water was very good. May I have another?" Which of the following is necessarily true regarding this statement?
a. The marginal utility of the second glass is negative. b. The marginal utility of the second glass is less than the marginal utility of the first glass. c. The marginal utility of the second glass is positive. d. The water is free. e. The marginal utility of the third glass is negative.
In the short run, which of the following is the most likely effect of an unanticipated move to a more expansionary monetary policy?
a. an increase in employment b. a decrease in employment c. an increase in the velocity of money d. an increase in prices proportional to the rise in the money supply