The interest rate would fall and the quantity of money demanded would
a. increase if there were a surplus in the money market.
b. increase if there were a shortage in the money market.
c. decrease if there were a surplus in the money market.
d. decrease if there were a shortage in the money market.
a
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The fraction of additional income spent on imports is called the
A) marginal propensity to export. B) import function. C) marginal propensity to import. D) trade balance.
Four stores have a problem with theft and security is a public good. Let S stand for the number of person-hours of security patrols per week. The marginal benefit of security patrols to each of the stores is given by the formula MB = 200 - 2S. Patrols cost $20 per hour. If each store provided security independently, how much would each store provide?
A. 90 person-hours of patrols per week B. 100 person-hours of patrols per week C. 92.5 person-hours of patrols per week D. 97.5 person-hours of patrols per week
International trade can be mutually advantageous because it
a. encourages the adoption of sound institutions and policies. b. reduces the competitiveness of domestic industries and, thereby, makes it easier for the domestic producers to raise their prices. c. permits the trading partners to take advantage of reductions in per-unit costs in industries where economies of scale are important. d. does all of the above. e. does both a and c.
Starting at full employment, a business cycle can be described by the following sequence: ________ equilibrium, ________ equilibrium, ________ equilibrium.
What will be an ideal response?