Which of the following is not a determinant of demand?
A) A change in taste and preference
B) The number or buyers
C) A change in the price of the item in question
D) A change in the price of a substitute item
Answer: C) A change in the price of the item in question
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If banks cannot lend all of their excess reserves:
a. the money multiplier increases. b. the money multiplier decreases. c. the money multiplier stays the same. d. the amount of loans by the bank increases. e. checkable deposits decrease.
Producer surplus is measured as the area
A. below the demand curve and above the market price. B. below the supply curve and above the market price. C. above the supply curve and below the market price. D. above the demand curve and below the market price.
Producers of close substitutes have little or no incentive to merge.
Answer the following statement true (T) or false (F)
Money demand refers to
a. the total quantity of financial assets that people want to hold. b. how much income people want to earn per year. c. how much wealth people want to hold in liquid form. d. how much currency the Federal Reserve decides to print.