Refer to the data. Which of the following is correct?
Answer the question on the basis of the following demand schedule:
A. Although the slope of the demand curve is constant, price elasticity declines as we move
from high to low price ranges.
B. Although the slope of the demand curve is constant, price elasticity increases as we move
from high to low price ranges.
C. Although the demand curve is convex to the origin, price elasticity of demand is constant
throughout.
D. A steep slope means demand is inelastic; a flat slope means demand is elastic.
A. Although the slope of the demand curve is constant, price elasticity declines as we move
from high to low price ranges.
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The function that shows the inverse relationship between planned consumption and investment spending and the real interest rate, all else constant, is called the:
A) interest-related expenditure function. B) aggregate expenditure function. C) consumption function. D) investment function.
The observation that changes in an economic variable are unpredictable suggests that the relevant variable follows ________
A) a random walk B) tertiary unpredictability C) the life-cycle hypothesis D) the Tequila effect
In June 2012, the public debt in the United States was approximately
A) $5.8 billion. B) $90 billion. C) $1.6 billion. D) $15.8 trillion. E) $120 trillion.
The consumption function will shift upward if real asset and money holdings:
A. increase, if people expect prices to increase, if interest rates decrease, and if taxes decrease. B. increase, if people expect prices to increase, if interest rates increase, and if taxes increase. C. increase, if people expect prices to increase, if interest rates increase, and if taxes decrease. D. decrease, if people expect prices to decrease, if interest rates decrease, and if taxes decrease.