Sergio's rentals of Blu-ray movies increase by 10 percent when her income increases by 30 percent. Based on this information, we know that for Sergio, Blu-ray movies
A) are complements.
B) are substitutes.
C) are inferior goods.
D) have an inelastic demand.
E) are normal goods.
E
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In the New Keynesian open economy model, suppose the exchange rate is flexible and there is a decline in total factor productivity
A) expansionary fiscal policy is necessary. B) contractionary monetary policy is necessary. C) expansionary monetary policy is necessary. D) no policy intervention is necessary.
You have $1,000 in your checking account at Generous Savings and Loan (GSL). GSL holds $300 of your money in reserve and makes a $700 student loan to Wilma, who promises to repay the loan with interest. Wilma now has an additional $700 in her checking account. By how much has the money supply M1 increased?
a. $2,000 b. $1,700 c. $1,000 d. $700