Suppose the real money demand function isMd/P = 2400 + 0.2Y - 10,000 (r + ?e).Assume M = 4000, P = 2.0, ?e = .03, and Y = 5000. The real interest rate that clears the asset market is
A. 6%.
B. 11%.
C. 3%.
D. 14%.
Answer: B
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A price ceiling is a legally determined maximum price that sellers may charge
Indicate whether the statement is true or false
Which of the following is not a characteristic of perfect competition?
a. Firms and consumers all have perfect information about the good and market. b. Sellers can enter the market easily. c. All goods sold are identical. d. All consumers have identical individual demand curves.
A demand curve:
A. shows the relationship between price and quantity supplied. B. indicates the quantity demanded at each price in a series of prices. C. graphs as an upsloping line. D. shows the relationship between income and spending.