Figure 7-12
Refer to . When price falls from $50 to $40, it can be inferred that demand between those two prices is
a.
inelastic, since total revenue decreases from $8,000 to $5,000.
b.
inelastic, since total revenue increases from $5,000 to $8,000.
c.
elastic, since total revenue increases from $5,000 to $8,000.
d.
unit elastic, since total revenue increases from $5,000 to $8,000.
c
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The velocity of money can best be described as
A) how quickly prices are increasing. B) how quickly output is increasing. C) the number of times each dollar in the money supply is used to buy goods and services included in GDP. D) the growth rate of the money supply.
Suppose you received a 3 percent increase in your nominal wage. Over the year, inflation ran about 6 percent. Which of the following is true?
a. Your real wage fell. b. Your nominal wage fell. c. Both your nominal and real wages decreased. d. Although your nominal wage fell, your real wage increased. e. Both nominal and real wages increased.
Which of the following is most important if a country is going to achieve and sustain rapid economic growth?
What will be an ideal response?
The crowding-out effect refers to
A. an increase in the consumption of imported goods at the expense of domestic goods. B. a decrease in consumer spending caused by a decrease in consumer confidence. C. an increase in the consumption of domestic goods at the expense of imported goods. D. a decrease in consumption and investment caused by an increase in government borrowing.