If two goods are substitutes, then their cross-price elasticity of demand is
A. positive.
B. negative.
C. zero.
D. between zero and minus one.
A. positive.
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Homeowners receive tax benefits that are not available to renters
a. True b. False Indicate whether the statement is true or false
By buying bonds, the Fed decreases the quantity of reserves in the banking system and decreases the money supply.
a. true b. false
Suppose that the bond market and the money market start out in equilibrium. Explain the process by which the interest rate and the price of bonds will change as a result of the Fed increasing the money supply
If the marginal propensity to consume (MPC) is 0.75 and if policy makers wish to increase real GDP by $300 million to fight a recession, then by how much would taxes have to change?
A. -$30 million B. -$50 million C. -100 million D. -300 million