An increase in the real risk-free interest rate causes the:
a. Preferred asset ratio for currency in circulation (C/D) to fall, which decreases the quantity of real loanable funds supplied.
b. Preferred asset ratio for customary reserves (U/D) to fall, which increases the quantity of real loanable funds supplied.
c. Preferred asset ratio for near money (N/D) to fall, which decreases the quantity of real loanable funds supplied.
e. None of the above.
.B
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Refer to the above figure. In order to stay open in the short run, this firm must
A) earn a positive profit. B) receive a price equal to or greater than the minimum of its average variable cost. C) receive a price exactly equal to its average total cost. D) recover its fixed cost.
The quantity demanded of good X falls by 20% and, in response, your income goes down by 10% and, the income elasticity of demand would be:
a. 2 b. 4 c. .5 d. .20