Joan has the following assets and liabilities:Credit Card balance$1000Cash$200Government bonds$3,000Checking$1,500Car loan balance$10,000Car$15,000Which of the following actions would increase Joan's money demand by $100?
A. Joan pays $100 cash for a new lamp.
B. Joan sells a $100 government bond and puts the proceeds in her checking account.
C. Joan writes a check for $100 to pay down her car loan balance.
D. Joan writes a check for $100 to pay down her credit card balance.
Answer: B
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According to Friedman, people behave differently with respect to the different kinds of incomes they earn. For example, the MPC in 2002 is associated with their _________ income earned in 2000 . The difference between the income earned in 2001, and that income in 2002 is called ___________ income
a. relative; absolute b. absolute; relative c. permanent; transitory d. transitory; permanent e. transitory; transitory
Answer the following statements true (T) or false (F)
1. The aggregate expenditures schedule relates total spending with the price level, while the aggregate demand schedule relates total demand for output with income. 2. The equivalent of the aggregate supply curve in the aggregate expenditures model is the 45-degree line. 3. If the price level increases, then the aggregate expenditures schedule will shift down and the aggregate demand curve will shift to the left. 4. The aggregate expenditures model and the immediate-short-run aggregate supply have similar assumptions regarding the economy's price level.
Refer to the diagrams, which pertain to monopolistically competitive firms. Short-run equilibrium entailing economic loss is shown by:
A. diagram a only.
B. diagram b only.
C. diagram c only.
D. both diagrams a and c.
For which of the following goods is the marginal benefit of search likely to be greatest?
a. a pair of shoes b. an automobile c. a jar of honey d. a loaf of bread e. a pair of jeans