As we approached the end of the millennium, many economic crackpots advised citizens to hold large quantities of cash in anticipation of Y2K disasters. What effect would this have had on velocity if many people had been foolish enough to follow this advice?
A. Velocity would have decreased.
B. Velocity would have increased.
C. Velocity would have remained constant.
D. Velocity is unrelated to cash balances.
Answer: A
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Starting from long-run equilibrium, a decrease in autonomous investment results in ________ output in the short run and ________ output in the long run.
A. lower; potential B. higher; higher C. higher; potential D. lower; higher
Which of the following statements is true?
A) Marginal analysis is a key component in the process of optimization in levels. B) In both the techniques of optimization, all costs have to be converted to the same unit of measurement. C) Optimization in levels calculates the change in net benefits when a person switches from one alternative to another. D) Only direct costs are considered when the net benefits of the alternatives are calculated.
When the U.S. dollar depreciates in relation to the Swiss franc:
a. a U.S. importer will need more dollars to pay for an invoice denominated in Swiss francs. b. a Swiss exporter will receive more Swiss francs for an invoice denominated in the exporter's currency. c. Swiss imports of U.S. goods will fall. d. the Swiss franc is now worth less in terms of the U.S. dollar. e. a U.S. exporter will receive fewer dollars for an invoice denominated in Swiss francs.
You just took an Uber from home to campus for the first time and were willing to pay $13 for the trip. It was so much easier than driving yourself that you are willing to pay $21 for the same trip tomorrow. Determine if you have violated the law of demand based on your choices, and why or why not that is the case.
a. do not violate the law of demand because your preference for the product changed after you experienced the good. b. do violate the law of demand because the law of demand states that quantity demanded decreases as price increases. c. do not violate the law of demand because the law of demand states that quantity demanded increases as price increases. d. do violate the law of demand because you have chosen to buy the same amount of the product at two different prices.