In the short-run Keynesian model, investment is:
A. autonomous in relation to the interest rate.
B. upward sloping in relation to the price level.
C. downward sloping in relation to disposable income.
D. autonomous in relation to real GDP.
Answer: D
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If the Mexican peso (MXN) to Brazilian real (BRL) exchange rate goes from 5.9 MXN/BRL to 7.2 MXN/BRL
A) Brazilians decrease their demand for Mexican goods. B) Brazilians increase their demand for Mexican goods. C) Mexicans increase their demand for Brazilian goods. D) Not enough information to determine what happens.
Price ceilings are imposed if the government believes
a. the market fails to create an equilibrium price b. the equilibrium price is too low c. an excess supply of the good exists or will result in the near future d. the equilibrium price is too high e. quantity demanded is less than quantity supplied
Michael values a stainless steel refrigerator for his new house at $3,500, but he succeeds in buying one for $3,000 . Michael's consumer surplus is
a. $500. b. $3,000. c. $3,500. d. $6,500.
Hot dogs and hot dog buns are complements. An increase in the price of flour used to make hot dogs buns will
a. increase consumer surplus in the market for hot dog buns and decrease producer surplus in the market for hot dogs. b. increase consumer surplus in the market for hot dogs and increase producer surplus in the market for hot dog buns. c. decrease consumer surplus in the market for hot dog buns and increase producer surplus in the market for hot dogs. d. decrease consumer surplus in the market for hot dog buns and decrease producer surplus in the market for hot dogs.