In the Keynesian liquidity preference framework, a rise in the price level causes the demand for money to ________ and the demand curve to shift to the ________, everything else held constant
A) increase; left
B) increase; right
C) decrease; left
D) decrease; right
B
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If a 10% increase in the price of one good, A, results in an increase of 5% in the quantity demanded of another good, B, then it can be concluded that A and B are
A. complementary goods. B. substitute goods. C. secondary goods. D. independent goods.
The demand for salt is relatively price inelastic, while the demand for pretzels is relatively price elastic. How can you best explain why?
What will be an ideal response?
For a monopsony buyer of an input, the marginal expenditure curve
A) lies above the average expenditure curve. B) lies below the average expenditure curve. C) is identical to the average expenditure curve. D) lies below the input demand curve.
Based on the CPI, how do we measure annual inflation?
a. We compute the total price of a fixed set ("market basket") of goods and services in a base year, such as 2003, and in a future year, such as 2004. b. We get CPI for 2004 by multiplying the 2004 total cost with the 2003 total cost, and divide by 100 . A similar calculation will yield the CPI value for 2003. c. We get CPI for 2004 by adding the CPI value for 2003 to the CPI value for 2004, and multiply by 100. d. We compute the total cost of a fixed set ("market basket") of goods and services in a base year, such as 2003, and in a future year, such as 2004.