If the demand for a life-saving drug was perfectly inelastic and the price doubled, the quantity demanded would
A) also double.
B) decrease by 50%.
C) be cut in half.
D) remain constant.
Answer: D
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One of the characteristics of financial repression is
(a) negative real interest rates. (b) lack of credit rationing. (c) capital flowing to the highest rate of return. (d) all of the above. (e) none of the above.
In an economy that is at full employment, an increase in money supply will result in inflation, unless
A) velocity increases. B) velocity decreases. C) real GDP falls. D) tax reduction is proportional to increases in the money supply.
If there is a dollar-for-dollar direct expenditure offset, then
A) increases in aggregate demand will also increase long-run aggregate supply. B) increases in government spending will not increase aggregate demand. C) increases in aggregate demand will increase the price level, but leave real output unchanged. D) increases in aggregate demand will increase real output, but leave the price level unchanged.
Which of the following statements cannot be made regarding consumer preferences?
a. Pat enjoys her second cotton candy less than her first. b. Bill enjoys his second cotton candy as much as the first. c. Arnie enjoys two cotton candies more than one cotton candy. d. Arnie enjoys two cotton candies more than Pat enjoys one cotton candy. e. Bill and Arnie enjoy their second cotton candy less than they do their first.