If the short run elasticity of demand for bus service is 1.01, we would expect the long run elasticity of demand to be:
a. relatively inelastic.
b. greater than 1.01
c. equal to 1.01.
d. less than 1.01.
b
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A decrease in the quantity of reserves held by commercial banks could be the result of
A) a decision by U.S. households to hold less currency. B) the sale of government securities by the Federal Reserve. C) a decrease in the government's budget deficit. D) an increase in the exchange rate.
A decrease in money supply causes the real interest rate to ________ and output to ________ in the short run, before prices adjust to restore equilibrium
A) rise; rise B) rise; fall C) fall; rise D) fall; fall
The demand curve for foreign exchange
a. slopes downward b. slopes upward c. is horizontal, because no individual country can influence the price of foreign exchange d. is vertical, because no individual country can influence the price of foreign exchange e. may slope downward or upward
Aiden must decide whether or not to go to law school. He knows that he can earn $50,000 per year with his bachelor's degree, but he expects to earn a minimum of $58,000 per year with the law degree. An economist would advise him to
a. take the job that just requires the bachelor's degree. b. go to law school, but only if he can finish within 3 years. c. go to law school. d. consider costs, revenues, and any nonmonetary job considerations he might have also.