All other things unchanged, we expect that a reduction in interest rates will tend to
A) increase the quantity of money demanded and increase velocity.
B) increase the quantity of money demanded and reduce velocity
C) reduce the quantity of money demanded and increase velocity.
D) reduce the quantity of money demanded and reduce velocity.
Ans: B) increase the quantity of money demanded and reduce velocity
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The only way a consumer can optimize at a corner of her budget is if at least one of the goods is not essential.
Answer the following statement true (T) or false (F)
If an unanticipated increase in aggregate demand results in an output beyond the economy's long-run capacity, long-run equilibrium will eventually be restored by
a. an increase in the economy's productive capacity (LRAS shifts to the right). b. higher resource prices, an increase in SRAS, and a decrease in the general level of prices. c. higher resource prices, a decrease in SRAS, and an increase in the general level of prices. d. a decrease in the natural rate of unemployment.
When a tax is levied on the sellers of a good, the
a. supply curve shifts upward by the amount of the tax. b. quantity demanded decreases for all conceivable prices of the good. c. quantity supplied increases for all conceivable prices of the good. d. None of the above is correct.
The following is cost information for the Creamy Crisp Donut Company: Entrepreneur's potential earnings as a salaried worker = $50,000 Annual lease on building = $22,000 Annual revenue from operations = $380,000 Payments to workers = $120,000
Utilities (electricity, water, disposal) costs = $8,000 Value of entrepreneur's talent in the next best entrepreneurial activity = $80,000 Entrepreneur's forgone interest on personal funds used to finance the business = $6,000 Refer to the data. Creamy Crisp's explicit costs are: A. $286,000. B. $150,000. C. $94,000. D. $156,000.