When considering the change to the money demand curve, if the interest rate rises, the quantity demanded is:
A. lower, moving rightward along the money demand curve.
B. lower, moving leftward along the money demand curve.
C. higher, moving leftward along the money demand curve.
D. higher, moving rightward along the money demand curve.
Answer: B
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In early 2008, the housing crisis and rising oil prices increased the risk of recession in the United States. What fiscal policy action was taken by Congress and the president to counter these events?
A) Income taxes were raised to reduce the federal budget deficit and reduce interest rates. B) Taxpayers were given rebates on taxes they already paid. C) There was an increase in government spending on defense and unemployment compensation. D) The Federal Reserve cut its target for the federal funds rate.
If one is interested in knowing whether or not a pair of products are substitutes, one would be interested in the value of the: a. elasticity of supply
b. price elasticity of demand. c. income elasticity of demand. d. cross-price elasticity of demand.