Changes in the interest rate bring the money market into equilibrium according to
a. both liquidity preference theory and classical theory.
b. neither liquidity preference theory nor classical theory.
c. liquidity preference theory, but not classical theory.
d. classical theory, but not liquidity preference theory.
c
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Why is a small country more likely to gain from international trade than a large country?
a. Because autarkic relative prices in a small country are likely to be quite different from the world relative prices. b. Because a small country, unlike a large country, does not have the resources it needs to be self-sufficient. c. Because small countries tend to be specialized in their production, while large countries tend to be diversified. d. Because a small country is less likely to encounter decreasing returns to scale than is a large country.
Since 1981, deaths from cardiovascular diseases have decreased in the United States
Indicate whether the statement is true or false
A perfectly elastic demand curve for a firm
A. is represented by a vertical line. B. means that with every unit price increase there will be a unit decrease in demand. C. is formulated by P× Q = a constant, for all prices and quantities. D. indicates that any increase in price will eliminate all purchases of its product.
Why is price inflation sometimes good in a recession?
A. Price inflation makes it harder for real wages to fall. B. Price inflation makes it harder for real wages to rise. C. Price inflation makes it easier for real wages to rise. D. Price inflation makes it easier for real wages to fall.