When the cross price elasticity between good X and other related goods is positive and very low, firm X can be assumed to have:
A) minimal market power.
B) moderate market power.
C) a significant amount of market power.
D) virtually no market power.
C
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An increase in government expenditure shifts the ________
A) labor demand curve to the left B) labor supply curve to the left C) labor demand curve to the right D) labor supply curve to the right
Suppose Congress increased spending by $100 billion and raised taxes by $100 billion to keep the budget balanced. What will happen to real equilibrium GDP?
A) Real equilibrium GDP will fall. B) Real equilibrium GDP will rise. C) Real equilibrium GDP will initially rise, but then fall below its previous equilibrium value. D) There will be no change in real equilibrium GDP.
Of the three players in the money supply process, most observers agree that the most important player is
A) the United States Treasury. B) the Federal Reserve System. C) the FDIC. D) the Office of Thrift Supervision.
What usually happens after an adverse supply shock?
What will be an ideal response?