Refer to Figure 24-1. Ceteris paribus, a decrease in firms' expectations of the future profitability of investment spending would be represented by a movement from
A) AD1 to AD2. B) AD2 to AD1. C) point A to point B. D) point B to point A.
B
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Assume that two countries are considering trading with each other for the first time. Also assume that one of the countries has an absolute disadvantage in producing everything compared to the other country
How would it still be possible for these two nations to benefit from trade with each other?
An increase in autonomous spending is sure to reduce the real money supply when
A) the economy is in the liquidity trap. B) the IS curve is vertical. C) the economy is at full employment. D) velocity is constant.
Safe Bank has an outside display which has the time and temperature that is always correct. This is an example of
A) an interference in the workings of the price system. B) a breakdown in communication between the bank and its customers. C) a negative externality. D) a positive externality.
A price elasticity of demand of -0.67 implies
a. Demand is inelastic b. Demand is elastic c. Demand is unitary elastic d. Demand is perfectly elastic