The price of oranges falls. What happens in the market for apples, which are a substitute for oranges?
A) The equilibrium price falls and the equilibrium quantity rises.
B) The equilibrium price rises and the equilibrium quantity falls.
C) The equilibrium price and quantity rise.
D) The equilibrium price and quantity fall.
Ans: D) The equilibrium price and quantity fall.
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In the circle model with constant marginal cost, each point on the circle will contain a firm in equilibrium if fixed entry costs are zero.
Answer the following statement true (T) or false (F)
Credit cards are:
a. M1 money. b. M2 money. c. near money. d. not money.
Which of the following compose the M2 money supply?
A. currency only B. currency, checkable deposits, and traveler's checks C. M1 plus large denomination time deposits and Eurodollar deposits D. M1 plus savings deposits and small-denomination time deposits
A contractionary fiscal policy is shown as a:
A. rightward shift in the economy's aggregate demand curve. B. rightward shift in the economy's aggregate supply curve. C. movement along an existing aggregate demand curve. D. leftward shift in the economy's aggregate demand curve.