If the quantity of money supplied does not respond to changes in the interest rate, then the money supply curve is
A) vertical.
B) horizontal.
C) relatively flat but upward sloping.
D) relatively steep but upward sloping.
Ans: A) vertical.
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The sum of the current account, capital and financial account, and official settlements account is
A) a positive number if the country has a trade surplus. B) a negative number if the country has a trade deficit. C) positive or negative depending on whether the domestic exchange rate is appreciating or depreciating. D) always equal to zero.
Suppose that when the price of strawberries decreases, Simone increases her purchase of whipped cream. To Simone
A) strawberries and whipped cream are normal goods. B) strawberries and whipped cream are complements. C) strawberries are a normal good and whipped cream is an inferior good. D) strawberries and whipped cream and substitutes.
In the dynamic aggregate demand and aggregate supply model, what is the result of aggregate demand increasing faster than potential real GDP?
What will be an ideal response?
According to utility theory, when total utility reaches a maximum, then marginal utility is:
A. Increasing B. Decreasing C. At a minimum D. Equal to zero