If the interest rate is below the equilibrium, which of the following occurs in this market?
a. excess supply
b. excess quantity supplied
c. excess demand
d. excess quantity demanded
c. excess demand
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Suppose when the price of calculators is $18, the quantity demanded is 90, and when the price is $22, the quantity demanded drops to 70. Using the mid-point method, the price elasticity of demand is:
A. 1.25 B. 25 percent C. 20 percent D. 25
Assume that business investment spending rises, and the increase is funded by greater borrowing in the capital markets. If the nation has low mobility international capital markets and a fixed exchange rate system, what happens to the net nonreserve international borrowing/lending balance and monetary base in the context of the Three-Sector-Model? a. The net nonreserve international
borrowing/lending balance becomes more positive (or less negative) and monetary base rises. b. The net nonreserve international borrowing/lending balance becomes more negative (or less positive) and monetary base falls. c. The net nonreserve international borrowing/lending balance becomes more negative (or less positive) and monetary base falls. d. The net nonreserve international borrowing/lending balance and monetary base remain the same. e. There is not enough information to determine what happens to these two macroeconomic variables.
David recently received an inheritance, and he is planning to invest the inheritance in one of four stock portfolios. Which of these portfolios would you expect to have the highest risk?
a. A portfolio with an average annual rate of return of 5%. b. A portfolio with an average annual rate of return of 8%. c. A portfolio with an average annual rate of return of 10%. d. A portfolio with an average annual rate of return of 14%.
A firm produces 300 products with 50 workers and 20 machines. When it doubles its inputs to 100 workers and 40 machines, production more than doubles to 700 products. This is an example of: