According to the classical model, a 10-percent increase in the money supply, holding everything else constant, will lead to
a. a 10% increase in prices, a 10% increase in the real wage, and a 10% increase in interest rates.
b. a 10% increase in prices, a 10% increase in the money wage, and a 10% increase in interest rates.
c. a 10% increase in prices, a 10% increase in the money wage, and no change in interest rates.
d. a 10% increase in prices and no change in the money wage or interest rates.
e. none of the above.
B
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Peet's Coffee and Teas produces some flavorful varieties of Peet's brand coffee. Is Peet's a monopoly?
A) No, Peet's is not a monopoly because there are many branches of Peet's. B) Yes, Peet's is the only supplier of Peet's coffee in a market where there are high barriers to entry. C) Yes, there are no substitutes to Peet's coffee. D) No, although Peet's coffee is a unique product, there are many different brands of coffee that are very close substitutes.
Suppose that in the free market, where the supply of the foreign currency is equal to demand for that currency, the peso-dollar exchange rate is 4 pesos = $1
Assume the central bank sets an official exchange rate at 3 pesos = $1, we can say that in the official market the dollar is A) overvalued. B) undervalued. C) appreciated. D) None of the above.