The demand curve for federal funds is ________.
A. downward-sloping, because higher interest rates encourage commercial banks to borrow federal funds
B. upward-sloping, because higher interest rates encourage commercial banks to lend federal funds
C. downward-sloping, because higher interest rates discourage commercial banks from borrowing federal funds, but lower rates encourage borrowing
D. upward-sloping, because higher interest rates discourage commercial banks from lending federal funds
Answer: C
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Of the following, which could cause the demand curve for personal computers to shift to the left?
a. a decrease in the price of personal computers b. an increase in the price of computer software c. a decrease in the price of computer software d. an increase in wealth (assuming personal computers are a normal good) e. expectations of an increase in the price of personal computers in the future
If two goods are complementary,
a. a decrease in the price of one good will lead to a decrease in the demand for the other b. the cross elasticity of demand is zero c. an increase in the price of one good will lead to an increase in the demand for the other d. the cross elasticity of demand is positive e. a decrease in the price of one good will lead to an increase in the demand for the other