Joshua consumes only apples and bread and is in consumer equilibrium. Joshua reads that eating bread is healthy, so his total utility from each loaf of bread increases. At his new consumer equilibrium Joshua would consume
A) more apples and less bread.
B) fewer apples and more bread.
C) some combination of apples and bread corresponding to a lower ratio of the marginal utility of bread to the marginal utility of apples.
D) the same quantity of apples and the same quantity of bread.
B
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An increase in the nominal interest rate
A) shifts the demand for money curve rightward. B) shifts the demand for money curve leftward. C) leads to an upward movement along the demand for money curve. D) leads to a downward movement along the demand for money curve.
Refer to Figure 19-8. The equilibrium exchange rate is originally at A, $1.25/euro. Suppose the European Central Bank pegs its currency at $1.00/euro
Speculators expect that the value of the euro will rise and this shifts the demand curve for euro to D2. If the European Central Bank abandons the peg, the equilibrium exchange rate would be A) $1.00/euro. B) $1.25/euro. C) $1.50/euro. D) $1.75/euro.