For a given increase in supply, the condition of demand that will result in the most significant change in price is when demand is
A. inelastic.
B. elastic.
C. perfectly elastic.
D. perfectly inelastic.
Answer: D
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When measuring GDP for a particular year, economists exclude the value of used furniture bought and sold because
What will be an ideal response?
An economy in which output has decreased and prices have decreased would suggest a:
A. decrease in short-run aggregate supply. B. increase in aggregate demand. C. increase in short-run aggregate supply. D. decrease in aggregate demand.
Assume there is no leakage from the banking system and that all commercial banks are loaned up. The required reserve ratio is 12.5%. If the Fed buys $20 million worth of government securities from the public, the change in the money supply will be
A. $20 million. B. $125 million. C. $160 million. D. $250 million.
Unintended costs that are imposed upon third parties as a result of an economic activity are called
a. marginal costs b. direct costs c. negative externalities d. positive externalities e. positive costs