Money neutrality is violated in which model?
a. new Keynesian model.
b. monetarist model.
c. real business cycle model.
d. classical model.
e. both c and d.
E
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If the demand curve for a good always has unitary price elasticity, what does this imply about consumer behavior?
A) Consumers do not react to a price change. B) Consumers will spend a constant total amount on the good. C) Consumers are irrational. D) Consumers do not obey the Law of Demand.
Eli is headed to his job harvesting grapes at a local vineyard. He earns $8 every hour he works there. He could also earn $7 an hour working as a bagger at the local grocery. Assuming Eli can only choose between these 2 jobs and that the benefits of each job are the same. Eli’s opportunity cost every hour he decides to work at his harvesting job is:
A. more than $7. B. less than $7. C. exactly $7. D. more than $7.