Calculate the change in the price level for each of the following events, taken one at a time, with other variables unchanged.
(a) Money supply increases 10%.
(b) Money demand increases 5%
(c) Money supply decreases 5% while money demand increases 5%.
(d) Money supply increases 15% while money demand increases 5%.
(a) 10%
(b) -5%
(c) -10%
(d) 10%
You might also like to view...
Interdependence in pricing may leading to
A) predatory pricing. B) price-fixing agreements. C) price bundling. D) shifts in elasticities.
What are the simplifications used in this chapter to derive the aggregate expenditures model?
What will be an ideal response?
Based on the table above which shows Chip's costs, if rice sells for $600 a ton, Chip will
A) shut down because he incurs an economic loss. B) shut down because the price is below his minimum average variable cost. C) stay open because he makes an economic profit. D) stay open because the price is above his minimum average variable cost.
If the value of a home falls below the amount owed on the mortgage for that property, the house is said to be ________
A) underwater B) collateralized C) swamped D) in short sale