Suppose the demand for a good is currently unit elastic over the relevant range. Then a new substitute good is introduced to the market. As a result, demand over that range is now likely to be
a. Unit elastic
b. Relatively elastic.
c. Relatively inelastic.
d. Perfectly elastic.
b
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A fiduciary monetary system ultimately rests on
A) the value of the assets backing up the system. B) the public's confidence in the system. C) the difficulty of counterfeiting the currency. D) the value of the metal backing up the system.
If Treasury deposits at the Fed are predicted to increase, the manager of the trading desk at the New York Fed bank will likely conduct ________ open market operations to ________ reserves
A) defensive; inject B) defensive; drain C) dynamic; inject D) dynamic; drain
The real rate of interest measures the ________ of capital investment.
A. marginal benefit B. value of the marginal product C. relative price D. opportunity cost
By definition, the purchasing power of money always drops when
A. there is a presidential election year. B. inflation occurs. C. the economy is experiencing full employment. D. deflation occurs.