Suppose we shopped for a basket of goods in Year 1 and it cost $350 . Suppose the same basket of goods adds up to $385 in Year 2 . If we use Year 1 as a base year, what would be the Year 2 CPI?

When the money market is drawn with the value of money on the vertical axis, if the value of money is above the equilibrium level,

a. the price level will rise. b. the value of money will rise. c. money demand will shift leftward. d. money demand will shift rightward.

Refer to Figure 5.5. Which diagram shows the income-consumption curve resulting from a decrease in income?

A. A

B. B

C. C

D. D