An increase in interest rates by the Fed based on a given and unchanged policy reaction function represents a ________ the aggregate demand curve, and higher interest rates resulting from an upward shift in the Fed's policy reaction function represents a ________ the aggregate demand curve.
A. movement up; shift left of
B. movement up; shift right
C. shift left of; movement up
D. shift left of; shift right of
Answer: A
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If the price elasticity of demand for insulin is equal to zero then the demand curve for insulin is
A) curvilinear. B) downward sloping. C) vertical. D) horizontal.
Suppose you like shoes and your income doubles. If shoes are a normal good, then an increase in your income will cause
a. the market demand for shoes to shift to the left b. the market demand for shoes to shift to the right c. your quantity demanded of shoes to decrease d. the market's quantity demanded of shoes to decrease e. market demand for shoes to shift to the left and your own quantity demanded of shoes to shift to the right
In the United States in the early 1980s, there was a government budget
a. surplus and a trade surplus. b. deficit and a trade deficit. c. surplus and a trade deficit. d. deficit and a trade surplus.
The real rate of return on holding cash is equal to:
A. the real interest rate. B. zero minus the inflation rate. C. the expected inflation rate. D. the nominal interest rate.