The absolute price elasticity of demand for a vertical demand curve
A) is infinite.
B) is 1.0.
C) is 0.
D) depends on where one is on the demand curve.
C
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When the feedback effects from income to the money market are included,
a. a given change in the money supply will cause a smaller change in the quantity of money demanded. b. a given change in the money supply will cause a larger change in the interest rate c. given change in the money supply will cause no change in the interest rate d. a given change in the money supply will cause a smaller change in the interest rate e. a given change in the money supply will cause a larger change in the quantity of money demanded.
Banks historically have used the discount window:
A. often, because its low interest rate can serve as a source of profit for banks. B. only during times of economic boom, when there is a high demand for loans. C. often, because it provides instant access to needed funds for banks. D. sparingly, because it is often seen as a sign of financial trouble for a bank.