If the demand for a product increases as the result of an increase in income, it can be concluded that the
a. product is an inferior good.
b. demand for the product is inelastic.
c. price elasticity of demand for the product equals unity.
d. product is a normal good.
D
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Assume there is a decrease in the market demand for a good sold by price-taking firms that are initially producing the profit-maximizing level of output. For the individual firm, this would result in:
A) a decrease in both price and the profit-maximizing quantity of output. B) a decrease in price and increase in the profit-maximizing quantity of output. C) an increase in both price and the profit-maximizing quantity of output. D) an increase in price and decrease in the profit-maximizing quantity of output.
Compared to the US, the unemployment rate in Europe was ________ throughout the 1960s and 1970s and ________ after 1980
A) higher; lower B) lower; higher C) lower; remained lower D) higher, remained higher
If equilibrium GDP is $800 billion greater than the full employment GDP and the multiplier is 4, how much is the inflationary gap?
What will be an ideal response?
During the great recession, the Chair of the Fed, Ben Bernanke introduced a new, untraditional, Fed tool to help stimulate the economy. What is this tool known as?
A. Quantitative Easing B. Too big to fail C. Bank bailout D. Monetary stimulus