According to the liquidity preference theory, an increase in the overall price level of 10 percent a. increases the quantity of money supplied by 10 percent, leaving the interest rate and the quantity of goods and services demanded unchanged. b. decreases the equilibrium interest rate, which in turn increases the quantity of goods and services demanded. c. increases the equilibrium interest rate, which in turn decreases the quantity of goods and services demanded. d. decreases the quantity of money demanded by 10 percent, leaving the interest rate and the quantity of goods and services demanded unchanged.

Total marketing effort is a term used to describe the critical decision factors that affect demand: price, advertising, distribution, and product quality. define the variable x to represent total marketing effort. a typical model that is used to predict demand as a function of total marketing effort is based on the power function: d = axb suppose that a is a positive number. different model forms result from varying the constant b. sketch the graphs of this model for b = 0, b = 1, 0< b< 1, b< 0, and b> 1. (we encourage you to use excel to do this.) what does each model tell you about the relationship between demand and marketing effort? what assumptions are implied? are they reasonable? how would you go about selecting the appropriate model?