Why can cross price elasticity of demand be positive or negative, unlike the price elasticity of demand with respect to the item's own price?
What will be an ideal response?
Cross price elasticity of demand is the responsiveness of the demand for one good to a change in the price of a related good. Goods are related in two ways: complements and substitutes. For complements, the demand for one good increases in response to a decrease in the price or another good, so that the cross price elasticity of demand for complementary goods is negative. For substitutes, the demand for one good decreases in response to a decrease in the price of another good, so that the cross price elasticity of demand for substitutable goods is positive.
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In the early 1990s, M2 growth underwent a dramatic ________, which some researchers believe ________ be explained by traditional money demand functions
A) surge; cannot B) surge; can C) slowdown; cannot D) slowdown; can
The Fed has the greatest control over which of the following?
A) the money multiplier B) discount loans C) the amount of excess reserves D) the nonborrowed monetary base
According to public choice theorists, the primary concern of policy makers is
a. the public interest b. achieving a social optimum for the economy as a whole c. to protect their jobs d. the provision of public goods e. market failure
The point where the PPF intersects the horizontal axis is
What will be an ideal response?