If consumers often purchase muffins to eat while they drink their lattés at local coffee shops, what would happen to the equilibrium price and quantity of lattés if the price of muffins falls?
a. Both the equilibrium price and quantity would increase.
b. Both the equilibrium price and quantity would decrease.
c. The equilibrium price would increase, and the equilibrium quantity would decrease.
d. The equilibrium price would decrease, and the equilibrium quantity would increase.
a
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Other things being equal, what is the effect of deficit spending on credit markets?
A) The supply of credit will increase while the demand for credit remains the same. B) The demand for credit increases while the supply of credit remains constant. C) Both the demand for credit and the supply of credit will decrease. D) Both the demand for credit and the supply of credit will increase.
The supply-of-money curve is almost perfectly inelastic because:
a. as interest rates rise, people will want to be supplied with more loans b. the Fed makes more money available in response to higher interest rates. c. banks generally find loans more profitable than keeping their assets as cash in their vaults or reserve deposits at the Fed, whether interest rates are 4% or 10%. d. the Fed lowers the discount rate as interest rates rise.
The Condorcet paradox shows that there is no scheme for aggregating individual preferences into a valid set of social preferences
a. True b. False Indicate whether the statement is true or false
An increase in aggregate demand in the classical range of the aggregate supply curve will
A. increase the price level, but not affect the real domestic output. B. increase real domestic output, but not affect the price level. C. decrease both real domestic output and the price level. D. increase both real domestic output and the price level.