How can the market demand for a product be inelastic but the demand for a particular firm is elastic?
A) There is no advertising.
B) There is a sufficiently large number of sellers.
C) There is only one or two sellers.
D) Buyers do not have complete information.
B
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Along a downward-sloping money demand schedule, as the interest rate falls
A) the quantity of money demanded falls. B) the quantity of money demanded rises. C) real income rises. D) real income falls.
The argument advanced by Milton Friedman for adopting a monetary growth rule is that
A) active monetary policy potentially destabilizes the economy. B) the Fed can control the money supply, but not the level of interest rates. C) a constant rate of growth in the money supply would eliminate the booms and recessions that make up the business cycle. D) the growth rate of M1 has been unstable.