If the nominal money supply grows 6%, real income rises 2%, and the inflation rate is 5%, then the income elasticity of money demand is
A. 1.0.
B. 0.75.
C. 0.5.
D. 1.5.
Answer: C
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Harvey Miller owns a baseball that was hit for a home run by Ted Williams
Harvey, a long-time Boston Red Sox fan, recently refused to sell his baseball for $75,000 even though he would not have paid someone more than $10,000 for the baseball if he did not already own it. Harvey explained his decision not to sell the baseball by noting that: "Ted Williams was my hero. This baseball has a great deal of sentimental value for me." Which of the following can explain Harvey's behavior? A) how social influences can affect consumption choices B) the difference between implicit and explicit costs C) the endowment effect D) the scarcity of home run baseballs hit by Ted Williams
A country producing a combination of 5 units of guns and 6 units of butter would be _________________ (outside/on/inside) the production possibilities curve.
Exchange rates affect:
I. international trade flows. II. international investment flows. III. corporate earnings. a. I b. II and III c. I and II d. I, II, and III
Which of the following will cause an outward (rightward) shift in the supply curve?
A) a reduction in the price of the good B) an increase in the price of labor input C) an increase in the number of consumers D) technological progress