Which of the following will cause movement along the reserve demand schedule?
a. a change in the price level
b. a change in real GDP
c. a change in tax rates
d. a change in interest rates
d
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Leo is a welfare recipient who qualifies for two means-tested cash benefit programs. If he does not earn any income, he receives $225 from each program. For each dollar he earns (which his employer is required to report to the welfare agency), his benefit from each program is reduced by 75 cents until the benefit equals zero. If Leo values income and not the source of the income, then if he can only earn $400 he will choose to:
A. not work and accept the benefits. B. not work and refuse the benefits. C. work part time. D. work.
The opportunity cost of holding money balances increases when:
a. the inflation rate decreases. b. the interest rate increases. c. the interest rate decreases. d. GDP is far from full employment.
Investment is _________ related to the interest rate, and NCO is __________ related to the interest rate.
A. negatively; negatively B. negatively; positively C. positively; positively D. positively; negatively
Given the utility-optimizing rule and the presence of diminishing marginal utility for a good
A) the demand curve for the good will be vertical. B) there will not be a well-defined demand curve. C) there will not be a substitution effect. D) the demand curve for the good will be negatively sloped.