A jeweler cut prices in his store by 20%. As a result:
a. Its total revenue would fall by 20% if the elasticity of demand was zero
b. Its total revenue would fall, but by less than 20% if the elasticity of demand is greater than zero but less than one.
c. Its total revenue would rise if the elasticity of demand is greater than one.
d. All of the above would be true.
d
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How will the exchange rate (foreign currency per dollar) respond to an increase in the relative rate of productivity growth in the United States in the long run?
A) Exchange rates will rise. B) Exchange rates will be unaffected by changes in the relative rate of productivity growth in the United States, both in the short run and in the long run. C) The exchange rate will be affected in the short run, but not in the long run. D) Exchange rates will fall.
According to Keynesian theory, changes in the money supply have a direct and immediate impact on aggregate demand
a. True b. False Indicate whether the statement is true or false
An opponent of monetary policy decisions by rule would point to which of the following as support of his case?
a. time inconsistency of policy b. flexibility to confront unforeseen circumstances c. political business cycle d. the ability to craft rules that account for all possible contingencies in advance
The M2 measure of money is suggested by the ________ approach to measuring money.
A. liquidity B. transactions C. speculative D. investment