Income increases cause no change in a household's choice set.
Answer the following statement true (T) or false (F)
False
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Which of the following is a characteristic of perfect competition?
a. Individual firms have the power to set prices. b. Firms produce differentiated products. c. New firms can easily enter the market. d. There are only a few very large firms producing all output in the market.
Suppose people anticipate an increase in the expected price level. Which curve(s) in the aggregate demand and aggregate supply model would be affected, and which way would it (they) shift?
Refer to the accompanying figure. Moving from demand curve D1 to demand curve D2 illustrates a(n):
A. decrease in demand. B. increase in demand. C. decrease in quantity demanded. D. increase in quantity demanded.
The theory of portfolio choice indicates that higher interest rates make money ________ desirable, and the demand for real money balances ________
A) less; falls B) more; falls C) less; rises D) more; rises