The cross-price elasticity of demand for textbooks and copies of old exams is ?3.5. If the price of copies of old exams increases by 10 percent, the quantity demanded of textbooks will:
A. rise by 3.5 percent.
B. rise by 35 percent.
C. fall by 35 percent.
D. fall by 3.5 percent.
Answer: C
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Assume a money multiplier of 3. If the Treasury finances a $30 million expenditure by selling securities to the Fed, the effect of this transaction on the money supply is that it will
A) remain unchanged. B) rise by $3 million. C) rise by $30 million. D) rise by $90 million.
What is new about environmental problems today is
A. that for the first time in history, we have environmental problems. B. the increased rate at which air and water pollution is occurring in the United States. C. the amount of attention the community now gives them. D. that environmental problems with pollution and garbage disposal have almost completely disappeared.
Jeong's uncompensated demand for gizmos is given by Q = 30 - 2p. Jeong's marginal willingness to pay function is
A) 30-2p. B) 15-.5Q. C) 30-2Q. D) -2.
Suppose you get a tax refund of $20,000 and instead of spending it on items that had been on your wish list for two years, you put it all in your checking account at the First National Bank of Urbana. And if that deposit allows the bank to loan out $17,000 . then the potential money multiplier must be
a. 0.067 b. 0.117 c. 0.667 d. 1.176 e. 6.667