Suppose the price of a six-pack of cola rises from $3 to $3.75 and the price of a pack of mints rises from $1.25 to $1.75 . If the CPI rises from 140 to 182, then people likely will buy
a. more cola and more mints.
b. more cola and fewer mints.
c. less cola and more mints.
d. less cola and fewer mints.
b
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Under the assumption of rational expectations, an anticipated increase in the money supply has no effect on
A) nominal GDP. B) real GDP. C) the price level. D) velocity.
Which of the following is true regarding value and exchange?
a. Middlemen fail to create value since they do not expand the supply of physical goods. b. A good or service has a given value regardless of who uses it or how it is used. c. If it were not for middlemen, transaction costs would be zero. d. Voluntary exchange creates value by channeling goods into the hands of people who value them most.
Identify the six parts of the financial system.
What will be an ideal response?
The figure above shows Ilene's budget line. If Ilene's income rises, her budget line will
A) rotate and become flatter. B) rotate and become steeper. C) shift rightward and its slope will not change. D) shift leftward and its slope will not change.