The costs to firms of changing prices are called
A) redistribution costs.
B) menu costs.
C) anticipation costs.
D) money illusion costs.
Answer: B
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Assume the technology for producing personal computers improves and, at the same time, individuals discover new uses for personal computers so that there is greater utilization of personal computers. Which of the following will happen to equilibrium price and equilibrium quantity?
A) Price will increase; quantity cannot be determined. B) Price will decrease; quantity cannot be determined. C) Quantity will increase; price cannot be determined. D) Quantity will decrease; price cannot be determined.
Everything else held constant, if a central bank makes a sterilized sale of foreign assets, then the domestic currency will
A) appreciate. B) depreciate. C) either appreciate, depreciate, or remain constant. D) not be affected.