How many interest rates were there in the IS-LM model in Chapter 5?
A) one
B) two
C) three
D) zero
A
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If two commodities are substitutes, then
a. they tend to be used together by consumers b. their prices are generally regulated by the government c. an increase in the price of one of them increases the supply of the other d. the cross-price elasticity of demand is positive e. the cross-price elasticity of demand is negative
The theory of the kinked demand curve is that
a. although the firm sells a differentiated product, too many competitors exist to make it worthwhile speculating on responses to the firm's behavior. b. freedom of entry will reduce profits to zero. c. a firm's competitors will follow it in a price decrease but not follow it in a price increase. d. firms are all seeking the position of joint profit maximization.
Money's basic advantage as compared to barter is that
A) everybody has money but not everyone has the opportunity to barter. B) a money system relies on a double coincidence of wants. C) money reduces transaction costs. D) money is the only medium you can use to store your wealth.
Describe the relationship between investment and the level of disposable income.
What will be an ideal response?