Refer to the graph shown. A quantity restriction of QR will:
A. lower market price to P2.
B. maintain a market price of P1.
C. raise market price to P0.
D. have no effect in the market depicted.
Answer: C
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Economists make assumptions in order to
a. mimic the methodologies employed by other scientists. b. minimize the number of experiments that yield no useful data. c. minimize the likelihood that some aspect of the problem at hand is being overlooked. d. focus their thinking on the essence of the problem at hand.
Suppose the money demand function is Md/P = 1000 + 0.2Y - 1000 (r + ?e).(a)Calculate velocity if Y = 2000, r = .06, and ?e = .04.(b)If the money supply (Ms) is 2600, what is the price level?(c)Now suppose the real interest rate rises to 0.11, but Y and Ms are unchanged. What happens to velocity and the price level? So if the nominal interest rate were to rise from 0.10 to 0.15 over the course of a year, with Y remaining at 2000, what would the inflation rate be?
What will be an ideal response?
If, as an entrepreneur, I am earning accounting profits of $70,000 per year and the opportunity cost of my time is $80,000
A. I should close my business. B. I am earning economic profits of $10,000. C. I am earning economic profits of $150,000. D. I am earning economic profits of $70,000.
In a certain economy, the components of aggregate spending are given by:C = 60 + 0.6(Y - T) - 1,000rI = 200 - 1,000rG = 200NX = 50T = 100Given the information about the economy above, what is the short-run equilibrium output if the real interest rate is 6 percent?
A. 825 B. 450 C. 925 D. 330