In practice, economists:
A. disagree about what the level of potential output is and about what policies are appropriate.
B. agree about what the level of potential output is but disagree about what policies are appropriate.
C. agree about what the level of potential output is and about what policies are appropriate.
D. disagree about what the level of potential output is but agree about what policies are appropriate.
Answer: A
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According to the quantity theory of money, if the long-run economic growth rate is 2.5%, by how much should the Fed increase the money supply if it wants inflation to be 2%?
A) 0.5% B) 1.25% C) 4.5% D) 5%
Elasticity is always
a. measured in dollars b. measured in dollars per unit of quantity c. measured in units of quantity d. measured in units of quantity per dollar e. independent of the units of measurement
If demand is elastic, an increase in price will decrease total revenue
a. True b. False Indicate whether the statement is true or false
Assume that a 4 percent decrease in income results in a 6 percent increase in the quantity demanded of a good. The income elasticity of demand for the good is
a. negative, and the good is an inferior good. b. negative, and the good is a normal good. c. positive, and the good is an inferior good. d. positive, and the good is a normal good.