The utility-maximizing rule:
A) is inconsistent with the law of demand.
C) implies a leftward shifting demand curve.
B) implies a perfectly elastic demand curve.
D) is consistent with the law of demand.
Answer: D) is consistent with the law of demand.
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The policy lever most commonly used by the Fed is:
A. Changes in the discount rate. B. Buying and selling bonds. C. Changes in the reserve requirement. D. Foreign-exchange operations.
To the extent that a governmental price control succeeds in affecting price, it can be expected to lead to a corresponding: a. reduction in the volume of sales only if the price is forced down
b. reduction in the volume of sales if the price is forced down and an increase in the volume of sales if the price is forced up. c. decrease in the volume of sales whether the price is forced up or down. d. increase in the volume of sales whether the price is forced up or down.