The precautionary demand for money arises
A. because people feel relatively certain what the future will bring.
B. because individuals are uncertain about the future.
C. when nominal income exceeds potential income.
D. as important exceptions to the Keynesian model.
E. because the transaction demand for money is never adequate to absorb the money supply.
B. because individuals are uncertain about the future.
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The definition of cross elasticity of demand for two products X and Y is
A. percentage change in quantity of X demanded/percentage change in quantity of Y demanded. B. percentage change in price of Y/percentage change in quantity of X demanded. C. percentage change in price of Y/percentage change in price of X. D. percentage change in quantity of X demanded/percentage change in price of Y.
If the isoquants are straight lines or L-shaped, then a cost-minimizing firm will
A) not be able to minimize costs. B) find the lowest isocost line touching the relevant isoquant. C) find the highest isocost line touching the relevant isoquant. D) choose not to produce any output.
The United Auto Worker (UAW) would best be classified as
A) a craft union. B) an industrial union. C) a guild. D) closed shop union. E) none of the above
An increase in demand will increase prices least when supply is
A. inelastic (but not perfectly inelastic). B. unit elastic. C. perfectly inelastic. D. elastic.