Suppose that the own-price elasticity for yogurt is -0.6. Which of the following statement(s) is (are) true?
A) Raise the price of yogurt in order to increase revenue in the short-run.
B) Lower the price of yogurt in order to increase revenue in the short-run.
C) The own-price elasticity of Dannon Yogurt is likely larger than -0.6 (in absolute value).
D) Both A and C
Answer: D
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In the foreign exchange market, how does a change in expected future U.S. exchange rate affect the supply of dollars?
What will be an ideal response?
Assume the economy is in recession and real GDP is below full employment. The marginal propensity to consume (MPC) is 0.75, and the government follows Keynesian economics by using expansionary fiscal policy to increase aggregate demand (total spending). If an increase of $1,000 billion aggregate demand can restore full employment, the government should:
a. increase spending by $250 billion. b. decrease spending by $750 billion. c. increase spending by $1,000 billion. d. increase spending by $750 billion.
Using real GDP to compare the level of economic well-being in two countries may be misleading because the value of ________ contributes to economic well-being, but is excluded from real GDP.
A. services B. formal education C. leisure D. capital goods
Refer to the diagrams below. In which of them would we see a shortage at the initial price after the indicated curve has shifted?
In the diagrams below, the subscript "1" refers to the initial position of the curve, while the subscript "2" refers to the final position after the curve shifts.
A. A and D
B. B and D
C. B and C
D. A and C