All else equal, the price elasticity of demand tends to be higher when:
A. a good has many substitutes.
B. the time horizon is relatively short.
C. supply increases.
D. people spend a small fraction of their budget on the good.
Answer: A
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According to classical economists, the credit market reaches an equilibrium when
A) desired investment equals desired saving. B) desired investment equals planned changes in aggregate supply. C) desired investment equals planned investment. D) planned investment equals government expenditures.
A business cycle is
A) the pattern of short-run upward and downward movements in total output. B) the increase in consumer spending that accompanies an increase in disposable income. C) the cyclical change in the nation's balance of trade. D) the cyclical movement in the interest rates.
Even if, on average, better-educated individuals can earn more money, all persons with more schooling will not necessarily have higher incomes
Indicate whether the statement is true or false
The federal funds market is the market in which
a. banks lend and borrow reserves from each other for short periods of time b. the Fed loans reserves to banks for short periods of time c. banks withdraw reserves from the Fed for short periods of time d. government borrows from the fed for short periods of time e. the Fed borrows from the government for short periods of time