The notion that the money in your possession will buy less when the price rises is provided as the explanation for
A. the real-balances effect.
B. diminishing marginal utility.
C. the substitution effect.
Answer: A
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If house purchases and renting an apartment are substitutes, then an increase in the price of a new house results in a rise in the rent charged for apartments
Indicate whether the statement is true or false
The LM curve shows points of equilibrium in the money market and combinations of
A) inflation and unemployment. B) aggregate supply and aggregate demand. C) income and the interest rate. D) money supply and money demand.
A circumcision is a surgical procedure to remove:
A. Cowper's gland. B. foreskin of the penis. C. scrotum. D. undescended testicles.
If the reserve ratio is 5 percent, then the money multiplier is approximated to be:
A. 10. B. 5. C. 2. D. 20.