If one is interested in knowing whether or not a product is a normal good, one would be interested in the value of the:
a. elasticity of supply
b. price elasticity of demand.
c. income elasticity of demand.
d. cross-price elasticity of demand.
c
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Workers and firms are currently expecting the price level to increase from 110 to 114. The Federal Reserve then announces that it will be reducing the growth rate of the money supply
If the Fed's announcement is credible, and firms and workers have rational expectations, describe how the expectations of firms and workers will be affected and how the change in expectations will affect the unemployment rate.
Which of the following statements is incorrect with respect to the balance of payments?
a. It constitutes a record of transactions between residents within one country. b. It consists of a current account, a capital account, and an account to record omissions and errors. c. Transactions that result in a demand for domestic currency are always entered as a credit. d. It must balance in the aggregate, but separate accounts can show deficits or surpluses. e. It constitutes a record of a country's trade in goods and services and financial assets.
When the Fed wants to decrease US interest rates it will buy US treasury bonds
a. true b. false
Use the figure below to answer the following question.
Refer to the three demand curves. A "decrease in demand" would be illustrated as a change from
A. line C to B. B. line A to C. C. point 1 to point 4. D. point 6 to point 3.