Because of the multiplier effect, ________ changes in government spending or taxation can cause ________ changes in real GDP.
A. small; large
B. small; small
C. large; small
D. large; large
Answer: A
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If the Fed sells government bonds in the open market, it will cause:
A) a downward movement along the supply curve for reserves. B) a shift of the supply curve for reserves to the left. C) a shift of the supply curve for reserves to the right. D) an upward movement along the supply curve for reserves.
A monopoly's economic profits are represented by:
a. (price minus marginal cost) times number of units sold. b. (price minus average cost) times number of units sold. c. (marginal revenue minus price) times number of units sold. d. (marginal cost minus price) times number of units sold.
If the percentage change in the price of a good is equal to the percentage change in the quantity demanded of that good, then the demand for that good is:
A. perfectly elastic. B. inelastic. C. elastic. D. unit elastic.
A central bank disinflates. Output falls by 3% for one year, 2% the second year, and 1% the third year. If inflation fell by 2 percentage points, what was the sacrifice ratio?