If the income elasticity of money demand is 3/4 and income increases 8%, by about how much does the price level change?
A) Falls by 6%
B) Unchanged
C) Rises by 6%
D) Rises by 8%
A
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Costs that are independent of the firm's level of output are called
a. fixed costs. b. marginal costs. c. opportunity costs. d. sunk costs.
When a monopolistically competitive firm cuts its price to increase its sales, it experiences a loss in revenue due to the
A) income effect. B) output effect. C) price effect. D) substitution effect.
In the two-period model with asymmetric information, a one-unit increase in the real rate of interest on bank deposits
A) causes the real loan interest rate to increase by more than one unit. B) causes the real loan interest rate to increase by less than one unit. C) cause the real loan interest rate to decrease by less than one unit. D) causes the real loan interest rate to decrease by more than one unit.
How are goods manufactured in other countries creating jobs in the United States?
A. People whose jobs were outsourced are now discouraged workers. B. People who have lost jobs have more time to shop and therefore increase demand for goods. C. U.S. firms are specializing in managing the trade of these goods. D. Foreign countries are importing U.S. natural resources.