Monetary policy will be effective in changing the gross domestic product of a nation only if:
a. planned investment expenditures are autonomous
b. planned investment expenditures are sensitive to interest rates.
c. interest rates are unresponsive to changes in money supply.
d. interest rates are sensitive to changes in the price level.
e. planned investment expenditures are sensitive to interest rates.
b
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The "law of demand" states that, other things remaining the same, the quantity demanded of any good is
A) inversely related to its price. B) directly related to its price. C) positively related to its price. D) directly related to the supply of the good.
Under a system of fixed exchange rates, what will happen if the price of a currency is set above market equilibrium? How can this be remedied?
Gertie saw a pair of jeans that she was willing to buy for $35. The price tag, though, said they were $29.99. Therefore:
A. Gertie should buy the jeans because the price is less than her reservation price. B. Gertie should buy the jeans because the price is more than her reservation price. C. Gertie should not buy the jeans because the price is not equal to her reservation price. D. Gertie should not buy the jeans because they will be of lower quality than she expected.
In order to maximize utility, a consumer should allocate money income so that
A. the marginal utility obtained from the last dollar spent on each product is the same. B. the elasticity of demand on all products purchased is the same. C. the total utility derived from each product consumed is the same. D. the marginal utility of the last unit of each product consumed is greater than the total utility of each product consumed.