The Fed increases money supply. In this case, the time lag problem of monetary policy may
A. increase real GDP in the short run.
B. decrease the velocity of money in the short run.
C. increase the velocity of money in the short run.
D. none of the above
Answer: B
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Two items which have a positive cross price elasticity of demand are referred to as
A) luxury goods. B) inferior goods. C) substitutes. D) complements.
Median income is the:
A. in the level earned by the household exactly in the middle of the national income distribution. B. the total national income divided by the total population. C. the total national income divided by the total number of households. D. 50% of the top quintile level of income.
In most places of the world, the marginal utility of water is low because
a. its supply is so abundant b. it is so essential c. it has so many uses d. total utility is so high e. it is very scarce
Assume that the equilibrium price for a good is $5. If the market price is $10, a:
A. shortage causes the price to decline toward $5. B. surplus causes the price to rise above $10. C. shortage causes the price to rise above $10. D. surplus causes the price to decline toward $5.