According to classical economists, if there is a 12% increase in the money supply, what will happen to the price level?
a) The price level will increase by 6%.
b) The price level will decrease by 6%.
c) The price level will increase by 12%.
d) The price level will decrease by 12%.
Ans: c) The price level will increase by 12%.
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If the cross-price elasticity of demand for a good is estimated at -3.9, estimate the percentage change in quantity demanded of the good when the price of the related good increases from $30 per unit to $75 per unit
Also, if it is known that the income elasticity of demand for the same good is 2.5, estimate the percentage change in demand if consumer income increases from $100 to $300.
If a perfectly competitive firm's price is above its average total cost, the firm
A) is incurring a loss. B) should shut down. C) is earning a profit. D) is breaking even.
Government picking winners
A) is the market model. B) is the central planning model. C) can be done with really good data. D) none of these choices.
If the tax multiplier is -4.0, what is the marginal propensity to consume?
a. 0.66 b. 0.75 c. 0.50 d. 0.80 e. 0.25