In Figure 4-5 above, at what point do we find the commodity market in equilibrium while the money market is not?
A) A
B) B
C) C
D) D
E) E
A
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The interest rate banks charge other banks for overnight loans is
A) the federal funds rate. B) targeted by the FDIC. C) higher than interest rates for securities and loans. D) lower than interest rates for loans, but higher than interest rates for securities.
Suppose the price of soda is $2 each and the price of a pizza slice is $4 each. David maximizes his utility by buying only sodas and pizza. He buys 5 sodas and 10 slices of pizza. If the price of a soda increases to $3 each, David will
A) decrease the number of sodas bought and the demand curve for sodas will shift leftward. B) decrease the number of sodas bought and move along the demand curve for soda. C) buy more pizza and move along the demand curve for pizza. D) buy less pizza and the demand curve for pizza will shift leftward.
Which of the following would most likely increase the demand for peanut butter?
a. a decrease in the price of jelly, a good that is often used with peanut butter b. the discovery that excessive consumption of peanut butter is harmful to one's health c. crop failures that raise the price of peanuts d. the invention of a new product that consumers think is a good substitute for peanut butter
If the expected inflation rate is unchanged, a rise in the natural rate of unemployment would
A. not shift either the short-run or long-run Phillips curves. B. shift both the short-run and long-run Phillips curves to the left. C. shift both the short-run and long-run Phillips curves to the right. D. shift the short-run Phillips curve to the left and shift the long-run Phillips curve to the right.