When the price level falls
a. households want to lend more, so the interest rate rises making the quantity of goods and services demanded rise.
b. households want to lend more, so the interest rate falls, making the quantity of goods and services demanded rise.
c. households want to lend more, so the interest rate rises, making the quantity of goods and services demanded fall.
d. None of the above are correct.
b
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If peanut butter and jelly are complements, then their cross elasticity of demand must be
A) infinitely high. B) a positive number that might be greater than 1. C) a number between zero and one. D) a negative number.
If the required reserve ratio is 15 percent, currency in circulation is $400 billion, checkable deposits are $1000 billion, and excess reserves total $1 billion, then the M1 money multiplier is
A) 2.54. B) 2.67. C) 2.35. D) 0.551.
If price equals 0, then consumer surplus
a. is 0 b. is maximized c. is price times quantity d. is equal to marginal utility e. cannot be determined
The difference between what a productive resource receives as payment for its use in production and the cost of bringing that resource into production is defined as
a. resource cost b. resource price c. rent d. MRP e. loanable funds