Everything else being equal, a higher interest rate
a. increases consumption spending as people face increasing debt
b. reduces consumption spending as people have a greater incentive to save
c. does not change consumption spending because consumption is only affected by income
d. does not change total consumption spending, but does change who does the spending
e. reduces both consumption spending and saving as people face increased debt
B
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The price elasticity of demand for gasoline is estimated to be -0.2. Two million gallons are sold daily at a price of $3. Use this information to calculate a demand curve for gasoline assuming it is linear
What will be an ideal response?
The U.S. antitrust enforcers will likely block a merger if
A. the merging firms are in different markets. B. the merger will substantially increase market power. C. the degree of concentration declines as a result of the merger. D. the merging firms already earn excessive profits.
Refer to the information provided in Figure 28.7 below to answer the question(s) that follow.
Figure 28.7Refer to Figure 28.7. Suppose the economy is initially at Point A. An expansionary fiscal policy moves the economy to Point ________ in the short run.
A. E B. B C. C D. D
You and a friend are arguing over the issue of the nonneutrality of money. You believe that money is not neutral, and to prove your point you would cite all of the following except
A. the fact that every recession was preceded by a drop in the money supply. B. a change in the leadership of the Fed and its policy was followed by noticeable changes in the money supply and a recession or inflation. C. a change in monetary institutions preceded a boom or recession. D. large gold discoveries that increased the money supply preceded an economic boom.