Suppose both the demand for and supply of salsa increase (although not necessarily by the same amount). What can we conclude about changes in the price and quantity of salsa?
A. Both the price and quantity decrease.
B. The quantity increases but the change in the price cannot be determined.
C. Both the price and quantity increase.
D. The price increases but the change in the quantity cannot be determined.
Answer: B
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If the currency drain increases, how can the Fed adjust the monetary base to offset the effect on the quantity of money?
What will be an ideal response?
If demand is perfectly inelastic
A) then a 1% increase in price leads to a fall in quantity of greater than 1%. B) then a 1% increase in price leads to a fall in quantity of less than 1%. C) then a 1% increase in prices then quantity demanded falls to zero. D) then a 1% increase in price has no effect on quantity demanded.
If a bond's coupon adjusts to pay a constant real rate of return, then an increase in inflation would cause
A) the nominal coupon payment to rise. B) the nominal coupon payment to fall. C) the nominal coupon payment to remain unchanged. D) the bond's price to fluctuate wildly.
If it costs $8 to produce a certain product and the product sells for $9, then
a. the markup is approximately 11.1 percent b. the market for this product must be monopolistic c. the markup is $1 d. firms in this industry should shut down to minimize their losses e. the revenue gained from the last unit produced is $1