If the Fed increases the reserve ratio from 5 percent to 12.5 percent, then the money multiplier
a. decreases from 20 to 8.
b. decreases from 12.5 to 5.
c. increases from 8 to 20.
d. increases from 5 to 12.5.
a
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The law of demand for dollars in the foreign exchange market means that the
A) lower the exchange rate, the greater the quantity of dollars demanded. B) higher the exchange rate, the smaller the quantity of dollars demanded. C) lower the exchange rate, the smaller the quantity of U.S. exports demanded. D) Both answers A and B are correct.
A decrease in the price of a good will cause a leftward shift of the demand curve, if it is a normal good
a. True b. False
A health club sells 50 memberships when the monthly price is $60 and 70 memberships when the monthly price is $40 . Using the method of average values, the price elasticity of demand for memberships at this health club is
a. 6.00 b. 0.10 c. 1.00 d. 0.25 e. 0.83
If the price of a slice of pizza falls from $2 to $1.5, a pizza-loving consumer will
A) see her purchasing power fall. B) see her purchasing power rise. C) substitute more Chinese food for pizza. D) spend more on soft drinks and less on pizza.