Given the strict quantity theory of money, if the quantity of money were decreased by 50 percent, prices would:
A. fall by 50 percent.
B. rise by 50 percent.
C. increase by 100 percent.
D. decrease by 100 percent.
Answer: A
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The short-run aggregate supply curve can slope upward because
A) prices are fixed in the short run. B) wages adjust immediately to changing economic circumstances. C) producers have misperceptions about the aggregate price level. D) prices adjust instantaneously.
In the game in Scenario 13.17, who moves first?
A) Potential Entrant B) Incumbent Monopoly C) It's a sequential game; firms alternate moving first. D) Both players move simultaneously. E) Who moves first is decided by the equilibrium.
Which of the following would shift the money demand curve to the left?
a. A decrease in the price level. b. An increase in the interest rate. c. An increase in the price level. d. An increase in real income. e. None of the above.
Which product will have the most elastic demand curve?
A. Thread B. Heating oil C. A new automobile D. Cigarettes