In the aggregate expenditure (AE) model, when real GDP exceeds aggregate planned expenditure, actual inventories ________ planned inventories and real GDP ________
A) are less than; decreases
B) exceed; increases
C) exceed; does not change
D) are less than; increases
E) exceed; decreases
E
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Economists have found that the price elasticity of demand for water is higher in the summer than in the winter. Why is this likely to be so?
A. Winter water use tends to be for necessities such as cleaning and cooking, and summer water use tends to be for both necessities and non-necessities such as gardening and recreation. B. Winter is longer than summer, and price elasticity is lower over longer time horizons. C. Summer is longer than winter, and price elasticity is higher over longer time horizons. D. People take more vacations in the summer and so use less water at home.
The slope of the indifference curve between steak and lobster is always equal to the ratio of their prices
Indicate whether the statement is true or false
Which of the following accurately describes possible positions taken by hedgers?
A) may take a short position in the futures market to offset a long position in the spot market B) may take a short position in the spot market to offset a long position in the futures market C) may take a long position in the spot market to offset a short position in the futures market D) may take a long position in the futures market to offset a long position in the spot market
The creation of markets that were previously "missing":
A. can create winners and losers. B. increases total surplus. C. benefits those who interact in the new markets. D. All of these are true.