Use the following general linear demand relation: Qd=680-9P+0.006M-4Pr where M is income and is the price of a related good, R. From this relation it is apparent that the good is:
a. an inferior good
b. a substitute for good R
c. a normal good
d. a complement for good R
e. both c and d
Answer: e. both c and d
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If Brazil has a comparative advantage relative to Cuba in the production of sugar cane, then
A) the opportunity cost of production for sugar cane is lower in Brazil than in Cuba. B) the implicit costs of production for sugar cane are lower in Brazil than in Cuba. C) the explicit cost of production for sugar cane is lower in Brazil than in Cuba. D) the average cost of production for sugar cane is lower in Brazil than in Cuba.
People are likely to want to hold more money if the interest rate
a. increases, making the opportunity cost of holding money rise. b. increases, making the opportunity cost of holding money fall. c. decreases, making the opportunity cost of holding money rise. d. decreases, making the opportunity cost of holding money fall.
The ________ is the number of times a dollar bill exchanges hands in a year.
A. government spending multiplier B. money supply ratio C. exchange rate D. velocity of money
The Federal Reserve System controls the money supply primarily through
A. open market operations. B. accounting operations. C. reserve requirement changes. D. jawboning.