If the level of interest rates paid on time deposits rise relative to that paid by money market accounts, ceteris paribus, individual will
A) reduce their real money balances.
B) first reduce then increase their real money balances.
C) increase their real money balances.
D) hold the same amount of money.
A
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The price of coffee rose 40 percent and the quantity of coffee demanded fell by 20 percent. The quantity of doughnuts demanded also fell by 20 percent. From this information, we can conclude that
A) the demand for coffee is elastic. B) the demand for coffee is unit elastic. C) coffee is an inferior good. D) the cross elasticity demand between coffee and doughnuts is -0.5. E) the income elasticity of demand for coffee is 2.
All else constant, the choice of whether to use a labor-intensive production process or a capital-intensive one is depends on:
A) the absolute prices of capital and labor. B) the relative prices of capital labor. C) the type of market in which the firm operates. D) whether the economy is growing or shrinking.
If Md = 2,600 – 200r, the MPC = .75, G=100, and T = 100 . If the central bank wants the interest rate to be r=2, then the money supply must be
a. 5. b. 400 c. 300 d. 3,000 e. not enough information was given.
A new approach to management that uses market structures is
A) CAPM. B) market based management. C) total quality management. D) networking.