Suppose the central bank of a country announces that interest rates will remain between 1 and 2 percent for the next 2 years. This is an example of:
a. open market operations.
b. deficit financing.
c. forward guidance.
d. quantitative easing.
c
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If the cross price elasticity of two goods is -3.5, then
A) these two products are relatively elastic substitutes. B) these two products are relatively inelastic substitutes. C) these two products are relatively elastic complements. D) these two products are relatively inelastic complements.
Refer to Figure 4.2. The substitution effect on the quantity of clothing purchased is:
A) the change from C3 to C1. B) the change from C3 to C2. C) the change from C2 to C1. D) the change from C1 to C2. E) none of the above
An aggregate production function, when shown on a graph,
a. is linear and slopes upward b. is linear and slopes downward c. is horizontal d. is vertical e. slopes upward, and flattens out as more labor is used
Refer to the below graph of the supply and demand for agricultural products. Which of the following best describes the long-run decline of the U.S. agricultural industry?
A. A shift in supply from S1 to S2 and a shift in demand from D2 to D1
B. A shift in supply from S1 to S3 and a shift in demand from D1 to D2
C. A shift in supply from S3 to S1 and a shift in demand from D1 to D3
D. A shift in supply from S1 to S2 and a shift in demand from D3 to D1