In the absence of high or volatile inflation, an increase in the price of oil:
A. can be confidently interpreted as meaning that oil producers are earning greater profit.
B. can be confidently interpreted as meaning that the money supply has increased.
C. can be confidently interpreted as meaning that oil has become more scarce.
D. can be confidently interpreted as meaning that the velocity of money has increased.
Ans: C. can be confidently interpreted as meaning that oil has become more scarce.
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If you spend a large portion of your income on a good,
A) supply of that good would be price elastic. B) demand for that good is more elastic than if you spent a smaller portion of your income on the good. C) supply of that good is price inelastic. D) demand for that good is less elastic than if you spent a smaller portion of your income on the good. E) the good must be able to be produced at a constant (or gently rising) opportunity cost.
The impact of financial markets on the economy comes partly through
A) the substitution effect. B) the wealth effect. C) the international trade effect. D) the travel effect.