Refer to the graph shown. A movement from D to B is most likely to be caused by:
A. a decrease in input prices.
B. a decrease in import prices.
C. a decrease in aggregate demand.
D. an increase in expected inflation.
Answer: C
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Your grandfather tells you that he earned $7,000/year in his first job in 1961. You earn $35,000/year in your first job in 2016. You know that average prices have risen steadily since 1961. You earn
A) less than 5 times as much as your grandfather in terms of nominal income. B) 5 times as much as your grandfather in terms of real income. C) less than 5 times as much as your grandfather in terms of real income. D) more than 5 times as much as your grandfather in terms of real income.
Demand is said to be ___________ when the quantity demanded is very responsive to changes in price.
a. elastic b. unit elastic c. inelastic d. independent
The aim of unconventional monetary policy tools is to:
A. increase the value of the dollar. B. stimulate the economy in coordination with fiscal policy. C. boost liquidity and reduce interest rates when credit channels are clogged. D. slow down liquidity and increase interest rates.
If ABC Inc and XYZ Inc have returns that are perfectly positively correlated:
A. adding ABC Inc to a portfolio that includes only XYZ Inc will increase risk. B. adding XYZ Inc. to a portfolio that consists of only ABC Inc. will neither increase nor decrease the risk of the portfolio. C. adding XYZ Inc to a portfolio that consists of only ABC Inc will neither increase nor decrease idiosyncratic risk but will lower systematic risk. D. adding XYZ Inc to a portfolio that consists of only ABC Inc will reduce risk.