If real income rises 5%, prices rise 3%, and nominal money demand rises 7%, what is the income elasticity of real money demand?
A) 3/4
B) 4/5
C) 5/6
D) 6/7
B
You might also like to view...
Structural unemployment will decrease when:
A. unemployment insurance benefits are increased. B. the minimum wage is decreased. C. the minimum wage is increased. D. union wages are increased.
Which of the following leads a good to have a high elasticity of supply? I. The good must be produced using unique resources. II. The good is produced using commonly available resources
A) I only B) II only C) I and II D) neither I nor II
Assume the economy is headed into a recession. Considering this, and recognizing that firms are slow to change the prices they charge for their products, are firms more or less likely to be able to pursue an effective markup pricing strategy in their
pursuit of positive economic profit? Why?
When a lender refuses to make a loan, although borrowers are willing to pay the stated interest rate or even a higher rate, the bank is said to engage in
A) coercive bargaining. B) strategic holding out. C) credit rationing. D) collusive behavior.