If the velocity of money is completely insensitive to changes in the rate of interest, the
A) LM curve will be horizontal.
B) LM curve will be vertical.
C) IS curve will be horizontal.
D) IS curve will be vertical.
B
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If you real disposable income goes up by $1000 per week, and your real consumption spending goes up by $800 per week, you have an MPS of
A) 0.2. B) 0.8. C) 1.2. D) 1.0.
If the market price of a product falls and as a result total revenue of firms falls, we can conclude that
A) demand is elastic in this price range. B) the product's price is above the midpoint of its demand curve. C) demand is inelastic in this price range. D) the demand curve is horizontal.
Which of the following is likely to happen if people suddenly become more willing to lend money? a. An increase in demand for loanable funds will increase the interest rate
b. An increase in the supply of loanable funds will increase the interest rate. c. An increase in the supply of loanable funds will decrease the interest rate. d. An increase in demand for loanable funds will decrease the interest rate. e. A simultaneous increase in both the supply of and demand for loanable funds makes it impossible to predict what will happen to the rate of interest.
The increase in output that is generated by an additional unit of input is called the:
A. production function. B. input-output relationship. C. resource product. D. marginal product.