If Sam, the Pizza Man, lowers the price of his pizzas from $6 to $5 and finds that sales increase from 400 to 600 pizzas per week, then the demand for Sam's pizzas in this range is:
A. inelastic.
B. elastic.
C. unit elastic.
D. inferior.
Answer: B
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The Federal Reserve System began operations in
A) 1834. B) 1896. C) 1914. D) 1935.
The M2 money supply is equal to the M1 money supply plus
A) small time deposits, savings deposits, and retail money market mutual fund shares. B) all credit card balances and retail money market mutual fund shares. C) large time deposits and retail money market mutual fund shares. D) every account held by commercial banks.
If you were a UN advisor to Sri Lanka and recommended the unbalanced development strategy, you would suggest
a. from beginning to end, massive government planning, financing, and administering the development process, similar to the big-push strategy b. initial private investment because it is no real cost to the government but later rely on government's forward and backward linkages c. initial UN aid in infrastructure but otherwise leaving the development process to government planning and financing d. massive investment by the United Nations e. initial government investment in infrastructure but otherwise leaving the development process to private sector entrepreneurs
Suppose that the central bank must follow a rule that requires it to increase the money supply when the price level falls and decrease the money supply when the price level rises. If the economy starts from long-run equilibrium and aggregate supply shifts left, the central bank must
a. decrease the money supply so interest rates rise. b. decrease the money supply so interest rates fall. c. increase the money supply so interest rates rise. d. increase the money supply so interest rates fall.